Why Great Southern Bancorp (GSBC) 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. 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.
Great Southern Bancorp in Focus
Based in Springfield, Great Southern Bancorp (GSBC) is in the Finance sector, and so far this year, shares have seen a price change of 1.5%. The bank holding company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 2.66%. This compares to the Financial - Savings and Loan industry's yield of 2.58% and the S&P 500's yield of 1.64%.
Looking at dividend growth, the company's current annualized dividend of $1.60 is up 14.3% from last year. Over the last 5 years, Great Southern Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8%. 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, Great Southern Bancorp's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GSBC for this fiscal year. The Zacks Consensus Estimate for 2022 is $5.97 per share, which represents a year-over-year growth rate of 9.34%.
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.
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. That said, they can take comfort from the fact that GSBC is not only an attractive dividend play, but also represents a compelling investment opportunity with a 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
Great Southern Bancorp, Inc. (GSBC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
