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Why Tompkins Financial (TMP) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tompkins Financial in Focus
Tompkins Financial (TMP - Free Report) is headquartered in Ithaca, and is in the Finance sector. The stock has seen a price change of -9.2% since the start of the year. The financial services company is currently shelling out a dividend of $0.62 per share, with a dividend yield of 4.03%. This compares to the Banks - Northeast industry's yield of 2.86% and the S&P 500's yield of 1.54%.
In terms of dividend growth, the company's current annualized dividend of $2.48 is up 1.6% from last year. Tompkins Financial has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.89%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Tompkins's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TMP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $5.58 per share, which represents a year-over-year growth rate of 12.27%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that TMP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Tompkins Financial (TMP) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tompkins Financial in Focus
Tompkins Financial (TMP - Free Report) is headquartered in Ithaca, and is in the Finance sector. The stock has seen a price change of -9.2% since the start of the year. The financial services company is currently shelling out a dividend of $0.62 per share, with a dividend yield of 4.03%. This compares to the Banks - Northeast industry's yield of 2.86% and the S&P 500's yield of 1.54%.
In terms of dividend growth, the company's current annualized dividend of $2.48 is up 1.6% from last year. Tompkins Financial has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.89%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Tompkins's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TMP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $5.58 per share, which represents a year-over-year growth rate of 12.27%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that TMP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).