Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Salisbury Bancorp in Focus
Headquartered in Lakeville, Salisbury Bancorp is a Finance stock that has seen a price change of 32.87% so far this year. The bank holding company is paying out a dividend of $0.3 per share at the moment, with a dividend yield of 2.42% compared to the Banks - Northeast industry's yield of 2% and the S&P 500's yield of 1.33%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 3.4% from last year. Over the last 5 years, Salisbury Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.79%. 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. Salisbury Bancorp's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.
SAL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $5.68 per share, which represents a year-over-year growth rate of 35.24%.
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. It's important to keep in mind that not all companies provide 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, SAL 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).
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Why Salisbury Bancorp (SAL) is a Top Dividend Stock for Your Portfolio
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Salisbury Bancorp in Focus
Headquartered in Lakeville, Salisbury Bancorp is a Finance stock that has seen a price change of 32.87% so far this year. The bank holding company is paying out a dividend of $0.3 per share at the moment, with a dividend yield of 2.42% compared to the Banks - Northeast industry's yield of 2% and the S&P 500's yield of 1.33%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 3.4% from last year. Over the last 5 years, Salisbury Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.79%. 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. Salisbury Bancorp's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.
SAL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $5.68 per share, which represents a year-over-year growth rate of 35.24%.
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. It's important to keep in mind that not all companies provide 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, SAL 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).