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Why Northeast Community Bancorp (NECB) is a Great Dividend Stock Right Now
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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 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 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.
Northeast Community Bancorp in Focus
Headquartered in White Plains, Northeast Community Bancorp (NECB - Free Report) is a Finance stock that has seen a price change of 7.91% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 2%. In comparison, the Banks - Northeast industry's yield is 2.48%, while the S&P 500's yield is 1.75%.
Looking at dividend growth, the company's current annualized dividend of $0.24 is up 18.8% from last year. Over the last 5 years, Northeast Community Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 16.32%. 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. Northeast Community Bancorp's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.
NECB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $1.11 per share, which represents a year-over-year growth rate of 48%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that NECB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Northeast Community Bancorp (NECB) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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.
Northeast Community Bancorp in Focus
Headquartered in White Plains, Northeast Community Bancorp (NECB - Free Report) is a Finance stock that has seen a price change of 7.91% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 2%. In comparison, the Banks - Northeast industry's yield is 2.48%, while the S&P 500's yield is 1.75%.
Looking at dividend growth, the company's current annualized dividend of $0.24 is up 18.8% from last year. Over the last 5 years, Northeast Community Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 16.32%. 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. Northeast Community Bancorp's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.
NECB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $1.11 per share, which represents a year-over-year growth rate of 48%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that NECB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).