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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Investors Bancorp in Focus
Based in Short Hills, Investors Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 13.75%. Currently paying a dividend of $0.11 per share, the company has a dividend yield of 3.72%. In comparison, the Financial - Savings and Loan industry's yield is 2.25%, while the S&P 500's yield is 1.98%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.44 is up 15.8% from last year. Over the last 5 years, Investors Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 34.51%. 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. Right now, Investors Bancorp's payout ratio is 54%, which means it paid out 54% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ISBC for this fiscal year. The Zacks Consensus Estimate for 2019 is $0.82 per share, with earnings expected to increase 1.23% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 ISBC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Investors Bancorp (ISBC) Could Be a Great Choice
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Investors Bancorp in Focus
Based in Short Hills, Investors Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 13.75%. Currently paying a dividend of $0.11 per share, the company has a dividend yield of 3.72%. In comparison, the Financial - Savings and Loan industry's yield is 2.25%, while the S&P 500's yield is 1.98%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.44 is up 15.8% from last year. Over the last 5 years, Investors Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 34.51%. 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. Right now, Investors Bancorp's payout ratio is 54%, which means it paid out 54% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ISBC for this fiscal year. The Zacks Consensus Estimate for 2019 is $0.82 per share, with earnings expected to increase 1.23% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 ISBC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).