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Why First Bancorp (FBNC) is a Great Dividend Stock Right Now
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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 Bancorp in Focus
Based in Southern Pines, First Bancorp (FBNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -7.33%. The bank holding company for First Bank is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.08%. This compares to the Banks - Southeast industry's yield of 1.97% and the S&P 500's yield of 1.44%.
In terms of dividend growth, the company's current annualized dividend of $0.88 is up 10% from last year. Over the last 5 years, First Bancorp has increased its dividend 3 times on a year-over-year basis for an average annual increase of 26.69%. 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. Right now, First Bancorp's payout ratio is 22%, which means it paid out 22% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBNC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.96 per share, with earnings expected to increase 9.09% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide 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, FBNC 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 Bancorp (FBNC) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 Bancorp in Focus
Based in Southern Pines, First Bancorp (FBNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -7.33%. The bank holding company for First Bank is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.08%. This compares to the Banks - Southeast industry's yield of 1.97% and the S&P 500's yield of 1.44%.
In terms of dividend growth, the company's current annualized dividend of $0.88 is up 10% from last year. Over the last 5 years, First Bancorp has increased its dividend 3 times on a year-over-year basis for an average annual increase of 26.69%. 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. Right now, First Bancorp's payout ratio is 22%, which means it paid out 22% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBNC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.96 per share, with earnings expected to increase 9.09% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide 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, FBNC 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).