- Oops!Something went wrong.Please try again later.
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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Independent Bank Corp. In Focus
Headquartered in Hanover, Independent Bank Corp. (INDB) is a Finance stock that has seen a price change of 9.45% so far this year. The holding company for Rockland Trust is paying out a dividend of $0.48 per share at the moment, with a dividend yield of 2.4% compared to the Banks - Northeast industry's yield of 1.94% and the S&P 500's yield of 1.29%.
Looking at dividend growth, the company's current annualized dividend of $1.92 is up 4.3% from last year. Independent Bank Corp. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 12.55%. 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. Independent Bank Corp.'s current payout ratio is 46%. This means it paid out 46% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for INDB for this fiscal year. The Zacks Consensus Estimate for 2021 is $4.36 per share, which represents a year-over-year growth rate of 19.13%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, INDB 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).
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
Independent Bank Corp. (INDB) : Free Stock Analysis Report
To read this article on Zacks.com click here.