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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Based in Indiana, First Commonwealth Financial (FCF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.84%. The financial holding company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.1% compared to the Banks - Northeast industry's yield of 2.55% and the S&P 500's yield of 1.53%.
Looking at dividend growth, the company's current annualized dividend of $0.54 is up 4.9% from last year. Over the last 5 years, First Commonwealth Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.25%. 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 Commonwealth Financial's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
FCF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $1.54 per share, representing a year-over-year earnings growth rate of 10.00%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 FCF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong 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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Based in Indiana, First Commonwealth Financial (FCF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.84%. The financial holding company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.1% compared to the Banks - Northeast industry's yield of 2.55% and the S&P 500's yield of 1.53%.
Looking at dividend growth, the company's current annualized dividend of $0.54 is up 4.9% from last year. Over the last 5 years, First Commonwealth Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.25%. 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 Commonwealth Financial's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
FCF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $1.54 per share, representing a year-over-year earnings growth rate of 10.00%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 FCF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).