- Oops!Something went wrong.Please try again later.
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bank of Marin in Focus
Based in Novato, Bank of Marin (BMRC) is in the Finance sector, and so far this year, shares have seen a price change of -15.53%. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 3.05%. In comparison, the Banks - West industry's yield is 2.71%, while the S&P 500's yield is 1.75%.
Looking at dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. Bank of Marin has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 12.95%. 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. Bank of Marin's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BMRC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.80 per share, representing a year-over-year earnings growth rate of 6.06%.
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.
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. With that in mind, BMRC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Bank of Marin Bancorp (BMRC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research