Why Eagle Bancorp Montana, Inc. (EBMT) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Eagle Bancorp Montana, Inc. In Focus
Based in Helena, Eagle Bancorp Montana, Inc. (EBMT) is in the Finance sector, and so far this year, shares have seen a price change of -5.32%. The company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.75% compared to the Banks - Midwest industry's yield of 3.36% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 0.9% from last year. Eagle Bancorp Montana, Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.65%. 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, Eagle Bancorp Montana, Inc.'s payout ratio is 38%, which means it paid out 38% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EBMT expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.56 per share, with earnings expected to increase 20.93% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that EBMT 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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Eagle Bancorp Montana, Inc. (EBMT) : Free Stock Analysis Report
