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Why First Guaranty Bancshares (FGBI) is a Great Dividend Stock Right Now
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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.
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.
First Guaranty Bancshares in Focus
Headquartered in Hammond, First Guaranty Bancshares (FGBI - Free Report) is a Finance stock that has seen a price change of 14.97% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.73%. In comparison, the Banks - Southeast industry's yield is 1.96%, while the S&P 500's yield is 1.46%.
Looking at dividend growth, the company's current annualized dividend of $0.64 is up 7.4% from last year. In the past five-year period, First Guaranty Bancshares has increased its dividend 2 times on a year-over-year basis for an average annual increase of 2.03%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First Guaranty Bancshares's current payout ratio is 26%. This means it paid out 26% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FGBI expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.56 per share, which represents a year-over-year growth rate of 5.79%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FGBI 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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Why First Guaranty Bancshares (FGBI) is a Great Dividend Stock Right Now
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.
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.
First Guaranty Bancshares in Focus
Headquartered in Hammond, First Guaranty Bancshares (FGBI - Free Report) is a Finance stock that has seen a price change of 14.97% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.73%. In comparison, the Banks - Southeast industry's yield is 1.96%, while the S&P 500's yield is 1.46%.
Looking at dividend growth, the company's current annualized dividend of $0.64 is up 7.4% from last year. In the past five-year period, First Guaranty Bancshares has increased its dividend 2 times on a year-over-year basis for an average annual increase of 2.03%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First Guaranty Bancshares's current payout ratio is 26%. This means it paid out 26% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FGBI expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.56 per share, which represents a year-over-year growth rate of 5.79%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FGBI 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).