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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 when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and, of course, 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.
Home BancShares (HOMB - Free Report) is headquartered in Conway, and is in the Finance sector. The stock has seen a price change of 4.66% since the start of the year. Currently paying a dividend of $0.20 per share, the company has a dividend yield of 2.7%. In comparison, the Banks - Southeast industry's yield is 2.23%, while the S&P 500's yield is 1.5%.
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.
Earnings growth looks solid for HOMB for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.34 per share, representing a year-over-year earnings growth rate of 16.42%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. 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 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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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and, of course, 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.
Home BancShares (HOMB - Free Report) is headquartered in Conway, and is in the Finance sector. The stock has seen a price change of 4.66% since the start of the year. Currently paying a dividend of $0.20 per share, the company has a dividend yield of 2.7%. In comparison, the Banks - Southeast industry's yield is 2.23%, while the S&P 500's yield is 1.5%.
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.
Earnings growth looks solid for HOMB for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.34 per share, representing a year-over-year earnings growth rate of 16.42%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. 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 HOMB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).