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BancFirst (BANF) is a Top Dividend Stock Right Now: Should You Buy?
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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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
BancFirst in Focus
Based in Oklahoma City, BancFirst (BANF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 17.66%. The Oklahoma financial services holding company is paying out a dividend of $0.3 per share at the moment, with a dividend yield of 2.04% compared to the Banks - Southwest industry's yield of 1.32% and the S&P 500's yield of 1.86%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 17.6% from last year. In the past five-year period, BancFirst has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.22%. 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. Right now, BancFirst's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BANF for this fiscal year. The Zacks Consensus Estimate for 2019 is $3.99 per share, which represents a year-over-year growth rate of 4.45%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 BANF 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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BancFirst (BANF) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
BancFirst in Focus
Based in Oklahoma City, BancFirst (BANF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 17.66%. The Oklahoma financial services holding company is paying out a dividend of $0.3 per share at the moment, with a dividend yield of 2.04% compared to the Banks - Southwest industry's yield of 1.32% and the S&P 500's yield of 1.86%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 17.6% from last year. In the past five-year period, BancFirst has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.22%. 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. Right now, BancFirst's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BANF for this fiscal year. The Zacks Consensus Estimate for 2019 is $3.99 per share, which represents a year-over-year growth rate of 4.45%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 BANF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).