Why BCB Bancorp (BCBP) is a Great Dividend Stock Right Now
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
BCB Bancorp in Focus
Headquartered in Bayonne, BCB Bancorp (BCBP) is a Finance stock that has seen a price change of 13.22% so far this year. The community bank is currently shelling out a dividend of $0.16 per share, with a dividend yield of 3.66%. This compares to the Banks - Northeast industry's yield of 2.27% and the S&P 500's yield of 1.45%.
Looking at dividend growth, the company's current annualized dividend of $0.64 is up 6.7% from last year. In the past five-year period, BCB Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 1.46%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. BCB Bancorp's current payout ratio is 33%. This means it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BCBP for this fiscal year. The Zacks Consensus Estimate for 2022 is $1.99 per share, representing a year-over-year earnings growth rate of 3.65%.
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.
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 BCBP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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BCB Bancorp, Inc. NJ (BCBP) : Free Stock Analysis Report
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