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This is Why Horizon Bancorp (HBNC) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -8.11% so far this year. The bank holding company is currently shelling out a dividend of $0.15 per share, with a dividend yield of 3.13%. This compares to the Banks - Northeast industry's yield of 2.37% and the S&P 500's yield of 1.45%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.31%. 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. Horizon Bancorp's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
HBNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.09 per share, with earnings expected to increase 4.50% 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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HBNC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This is Why Horizon Bancorp (HBNC) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -8.11% so far this year. The bank holding company is currently shelling out a dividend of $0.15 per share, with a dividend yield of 3.13%. This compares to the Banks - Northeast industry's yield of 2.37% and the S&P 500's yield of 1.45%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.31%. 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. Horizon Bancorp's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
HBNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.09 per share, with earnings expected to increase 4.50% 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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HBNC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).