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Are You Looking for a High-Growth Dividend Stock?

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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

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.

Headquartered in Porterville, Sierra Bancorp (BSRR - Free Report) is a Finance stock that has seen a price change of 0.03% so far this year. The parent company of Bank of the Sierra is paying out a dividend of $0.25 per share at the moment, with a dividend yield of 3.46% compared to the Banks - West industry's yield of 3.1% and the S&P 500's yield of 1.49%.

Looking at dividend growth, the company's current annualized dividend of $1.00 is up 6.4% from last year. Over the last 5 years, Sierra Bancorp has increased its dividend 3 times on a year-over-year basis for an average annual increase of 3.88%. 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. Sierra Bancorp's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BSRR expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.03 per share, with earnings expected to increase 7.45% from the year ago period.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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 BSRR 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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