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Why First United Corporation (FUNC) is a Top Dividend Stock for Your Portfolio
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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First United Corporation (FUNC - Free Report) is headquartered in Oakland, and is in the Finance sector. The stock has seen a price change of 8.99% since the start of the year. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 2.4%. In comparison, the Banks - Northeast industry's yield is 2.55%, while the S&P 500's yield is 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.88 is up 7.3% from last year. Over the last 5 years, First United Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 13.06%. 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. First United's current payout ratio is 24%, meaning it paid out 24% of its trailing 12-month EPS as dividend.
FUNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $3.65 per share, representing a year-over-year earnings growth rate of 13.71%.
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 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 FUNC 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 First United Corporation (FUNC) is a Top Dividend Stock for Your Portfolio
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First United Corporation (FUNC - Free Report) is headquartered in Oakland, and is in the Finance sector. The stock has seen a price change of 8.99% since the start of the year. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 2.4%. In comparison, the Banks - Northeast industry's yield is 2.55%, while the S&P 500's yield is 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.88 is up 7.3% from last year. Over the last 5 years, First United Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 13.06%. 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. First United's current payout ratio is 24%, meaning it paid out 24% of its trailing 12-month EPS as dividend.
FUNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $3.65 per share, representing a year-over-year earnings growth rate of 13.71%.
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 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 FUNC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).