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Are You Looking for a High-Growth Dividend Stock?

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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.

Bar Harbor Bankshares in Focus

Headquartered in Bar Harbor, Bar Harbor Bankshares (BHB) is a Finance stock that has seen a price change of -5.06% so far this year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 3.42%. In comparison, the Banks - Northeast industry's yield is 2.52%, while the S&P 500's yield is 1.64%.

Looking at dividend growth, the company's current annualized dividend of $1.04 is up 2% from last year. In the past five-year period, Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.35%. 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. Bar Harbor's current payout ratio is 38%, meaning it paid out 38% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BHB expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.18 per share, with earnings expected to increase 10.03% 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. It's important to keep in mind that not all companies provide 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. With that in mind, BHB 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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Bar Harbor Bankshares, Inc. (BHB) : Free Stock Analysis Report

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