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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. 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.
Provident Financial in Focus
Headquartered in Jersey City, Provident Financial (PFS - Free Report) is a Finance stock that has seen a price change of -4.25% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 4.14%. In comparison, the Financial - Savings and Loan industry's yield is 2.68%, while the S&P 500's yield is 1.68%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 3.2% from last year. In the past five-year period, Provident Financial has increased its dividend 3 times on a year-over-year basis for an average annual increase of 3.97%. 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, Provident Financial's payout ratio is 45%, which means it paid out 45% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PFS expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.21 per share, representing a year-over-year earnings growth rate of 0.91%.
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.
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, PFS 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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Provident Financial (PFS) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
Provident Financial in Focus
Headquartered in Jersey City, Provident Financial (PFS - Free Report) is a Finance stock that has seen a price change of -4.25% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 4.14%. In comparison, the Financial - Savings and Loan industry's yield is 2.68%, while the S&P 500's yield is 1.68%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 3.2% from last year. In the past five-year period, Provident Financial has increased its dividend 3 times on a year-over-year basis for an average annual increase of 3.97%. 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, Provident Financial's payout ratio is 45%, which means it paid out 45% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PFS expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.21 per share, representing a year-over-year earnings growth rate of 0.91%.
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.
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, PFS 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).