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This is Why First Busey (BUSE) is a Great Dividend Stock
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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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
First Busey in Focus
Based in Champaign, First Busey (BUSE - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 22.78%. The bank holding company is paying out a dividend of $0.23 per share at the moment, with a dividend yield of 3.48% compared to the Banks - Midwest industry's yield of 2.31% and the S&P 500's yield of 1.38%.
Looking at dividend growth, the company's current annualized dividend of $0.92 is up 4.5% from last year. First Busey has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.66%. 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. First Busey's current payout ratio is 44%. This means it paid out 44% of its trailing 12-month EPS as dividend.
BUSE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.06 per share, with earnings expected to increase 4.04% from the year ago period.
Bottom Line
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.
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. With that in mind, BUSE 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).
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This is Why First Busey (BUSE) is a Great Dividend Stock
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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
First Busey in Focus
Based in Champaign, First Busey (BUSE - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 22.78%. The bank holding company is paying out a dividend of $0.23 per share at the moment, with a dividend yield of 3.48% compared to the Banks - Midwest industry's yield of 2.31% and the S&P 500's yield of 1.38%.
Looking at dividend growth, the company's current annualized dividend of $0.92 is up 4.5% from last year. First Busey has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.66%. 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. First Busey's current payout ratio is 44%. This means it paid out 44% of its trailing 12-month EPS as dividend.
BUSE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.06 per share, with earnings expected to increase 4.04% from the year ago period.
Bottom Line
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.
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. With that in mind, BUSE 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).