Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Investors Bancorp in Focus
Investors Bancorp is headquartered in Short Hills, and is in the Finance sector. The stock has seen a price change of -36.63% since the start of the year. The holding company for Investors Bank is currently shelling out a dividend of $0.12 per share, with a dividend yield of 6.36%. This compares to the Financial - Savings and Loan industry's yield of 3.23% and the S&P 500's yield of 2.26%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 9.1% from last year. Investors Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 21.14%. 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. Investors Bancorp's current payout ratio is 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
ISBC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $0.92 per share, representing a year-over-year earnings growth rate of 19.48%.
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 have to be mindful 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 is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Investors Bancorp (ISBC) 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. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Investors Bancorp in Focus
Investors Bancorp is headquartered in Short Hills, and is in the Finance sector. The stock has seen a price change of -36.63% since the start of the year. The holding company for Investors Bank is currently shelling out a dividend of $0.12 per share, with a dividend yield of 6.36%. This compares to the Financial - Savings and Loan industry's yield of 3.23% and the S&P 500's yield of 2.26%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 9.1% from last year. Investors Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 21.14%. 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. Investors Bancorp's current payout ratio is 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
ISBC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $0.92 per share, representing a year-over-year earnings growth rate of 19.48%.
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 have to be mindful 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 is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).