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Why Home BancShares (HOMB) is a Top Dividend Stock for Your Portfolio
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Headquartered in Conway, Home BancShares (HOMB - Free Report) is a Finance stock that has seen a price change of -1.06% so far this year. The bank holding company is paying out a dividend of $0.20 per share at the moment, with a dividend yield of 2.86% compared to the Banks - Southeast industry's yield of 2.44% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 6.7% from last year. Over the last 5 years, Home BancShares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.28%. 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. Home BancShares's current payout ratio is 37%, meaning it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.34 per share, with earnings expected to increase 16.42% from the year ago period.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HOMB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Home BancShares (HOMB) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Headquartered in Conway, Home BancShares (HOMB - Free Report) is a Finance stock that has seen a price change of -1.06% so far this year. The bank holding company is paying out a dividend of $0.20 per share at the moment, with a dividend yield of 2.86% compared to the Banks - Southeast industry's yield of 2.44% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 6.7% from last year. Over the last 5 years, Home BancShares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.28%. 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. Home BancShares's current payout ratio is 37%, meaning it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.34 per share, with earnings expected to increase 16.42% from the year ago period.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HOMB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).