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This is Why Bar Harbor Bankshares (BHB) is a Great Dividend Stock
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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bar Harbor Bankshares in Focus
Bar Harbor Bankshares (BHB - Free Report) is headquartered in Bar Harbor, and is in the Finance sector. The stock has seen a price change of 0.83% since the start of the year. The bank is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.29% compared to the Banks - Northeast industry's yield of 2.19% and the S&P 500's yield of 1.45%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.96 is up 2.1% from last year. Over the last 5 years, Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.89%. 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. Bar Harbor's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BHB for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.87 per share, which represents a year-over-year growth rate of 5.51%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BHB 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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This is Why Bar Harbor Bankshares (BHB) is a Great Dividend Stock
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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bar Harbor Bankshares in Focus
Bar Harbor Bankshares (BHB - Free Report) is headquartered in Bar Harbor, and is in the Finance sector. The stock has seen a price change of 0.83% since the start of the year. The bank is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.29% compared to the Banks - Northeast industry's yield of 2.19% and the S&P 500's yield of 1.45%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.96 is up 2.1% from last year. Over the last 5 years, Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.89%. 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. Bar Harbor's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BHB for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.87 per share, which represents a year-over-year growth rate of 5.51%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BHB 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).