The First of Long Island (FLIC) is a Top Dividend Stock Right Now: Should You Buy?
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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
The First of Long Island in Focus
The First of Long Island (FLIC) is headquartered in Glen Head, and is in the Finance sector. The stock has seen a price change of -14.45% since the start of the year. The holding company for The First National Bank of Long Island is paying out a dividend of $0.2 per share at the moment, with a dividend yield of 4.33% compared to the Banks - Northeast industry's yield of 2.28% and the S&P 500's yield of 1.63%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.80 is up 3.9% from last year. Over the last 5 years, The First of Long Island has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.84%. 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, The First of Long Island's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FLIC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $1.97 per share, with earnings expected to increase 8.84% 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. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FLIC 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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