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Are You Looking for a High-Growth Dividend Stock? Financial Institutions (FISI) Could Be a Great Choice
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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Financial Institutions in Focus
Based in Warsaw, Financial Institutions (FISI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 10.16%. The holding company for Five Star Bank is currently shelling out a dividend of $0.25 per share, with a dividend yield of 3.53%. This compares to the Banks - Northeast industry's yield of 1.72% and the S&P 500's yield of 1.87%.
Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. Over the last 5 years, Financial Institutions has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.54%. 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, Financial Institutions's payout ratio is 37%, which means it paid out 37% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FISI for this fiscal year. The Zacks Consensus Estimate for 2019 is $2.62 per share, with earnings expected to increase 1.95% 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. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FISI is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Are You Looking for a High-Growth Dividend Stock? Financial Institutions (FISI) 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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Financial Institutions in Focus
Based in Warsaw, Financial Institutions (FISI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 10.16%. The holding company for Five Star Bank is currently shelling out a dividend of $0.25 per share, with a dividend yield of 3.53%. This compares to the Banks - Northeast industry's yield of 1.72% and the S&P 500's yield of 1.87%.
Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. Over the last 5 years, Financial Institutions has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.54%. 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, Financial Institutions's payout ratio is 37%, which means it paid out 37% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FISI for this fiscal year. The Zacks Consensus Estimate for 2019 is $2.62 per share, with earnings expected to increase 1.95% 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. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FISI is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).