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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
1st Source in Focus
1st Source (SRCE - Free Report) is headquartered in South Bend, and is in the Finance sector. The stock has seen a price change of 6.17% since the start of the year. The holding company for 1st Source Bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.45% compared to the Banks - Midwest industry's yield of 3.18% and the S&P 500's yield of 1.54%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.6% from last year. Over the last 5 years, 1st Source has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.43%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. 1st Source's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
SRCE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.93 per share, with earnings expected to increase 8.01% from the year ago period.
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. But, not every company offers 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 must be conscious 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 SRCE 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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1st Source (SRCE) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
1st Source in Focus
1st Source (SRCE - Free Report) is headquartered in South Bend, and is in the Finance sector. The stock has seen a price change of 6.17% since the start of the year. The holding company for 1st Source Bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.45% compared to the Banks - Midwest industry's yield of 3.18% and the S&P 500's yield of 1.54%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.6% from last year. Over the last 5 years, 1st Source has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.43%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. 1st Source's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
SRCE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.93 per share, with earnings expected to increase 8.01% from the year ago period.
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. But, not every company offers 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 must be conscious 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 SRCE is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).