Heartland Financial (HTLF) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Heartland Financial in Focus
Based in Dubuque, Heartland Financial (HTLF) is in the Finance sector, and so far this year, shares have seen a price change of 6.59%. The multibank holding company is currently shelling out a dividend of $0.28 per share, with a dividend yield of 2.25%. This compares to the Banks - Midwest industry's yield of 3.07% and the S&P 500's yield of 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 2.8% from last year. Over the last 5 years, Heartland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.91%. 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. Heartland Financial's current payout ratio is 23%, meaning it paid out 23% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HTLF for this fiscal year. The Zacks Consensus Estimate for 2023 is $5.41 per share, which represents a year-over-year growth rate of 11.32%.
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. However, not all companies offer 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 HTLF 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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Heartland Financial USA, Inc. (HTLF) : Free Stock Analysis Report
