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Is Home BancShares (HOMB) 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. But 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.
Home BancShares in Focus
Headquartered in Conway, Home BancShares (HOMB - Free Report) is a Finance stock that has seen a price change of 2.15% so far this year. The bank holding company is paying out a dividend of $0.11 per share at the moment, with a dividend yield of 2.02% compared to the Banks - Southeast industry's yield of 1.15% and the S&P 500's yield of 1.81%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.48 is up 20% from last year. In the past five-year period, Home BancShares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 29.31%. Future dividend growth will depend on earnings growth as well as 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 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $1.77 per share, with earnings expected to increase 31.11% from the year ago period.
Bottom Line
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HOMB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Is Home BancShares (HOMB) a High-Growth Dividend Stock?
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.
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.
Home BancShares in Focus
Headquartered in Conway, Home BancShares (HOMB - Free Report) is a Finance stock that has seen a price change of 2.15% so far this year. The bank holding company is paying out a dividend of $0.11 per share at the moment, with a dividend yield of 2.02% compared to the Banks - Southeast industry's yield of 1.15% and the S&P 500's yield of 1.81%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.48 is up 20% from last year. In the past five-year period, Home BancShares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 29.31%. Future dividend growth will depend on earnings growth as well as 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 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $1.77 per share, with earnings expected to increase 31.11% from the year ago period.
Bottom Line
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HOMB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).