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Are You Looking for a High-Growth Dividend Stock?

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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Headquartered in Souderton, Univest (UVSP - Free Report) is a Finance stock that has seen a price change of 0.92% so far this year. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 2.66%. In comparison, the Banks - Northeast industry's yield is 2.48%, while the S&P 500's yield is 1.47%.

Looking at dividend growth, the company's current annualized dividend of $0.88 is up 1.1% from last year. Over the last 5 years, Univest has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.61%. 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. Univest's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for UVSP for this fiscal year. The Zacks Consensus Estimate for 2026 is $3.40 per share, representing a year-over-year earnings growth rate of 8.63%.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide 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. 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 UVSP 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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