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This is Why German American Bancorp (GABC) 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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
German American Bancorp in Focus
Headquartered in Jasper, German American Bancorp (GABC - Free Report) is a Finance stock that has seen a price change of -2.46% so far this year. The financial services holding company is currently shelling out a dividend of $0.23 per share, with a dividend yield of 2.42%. This compares to the Banks - Midwest industry's yield of 2.69% and the S&P 500's yield of 1.62%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.92 is up 9.5% from last year. German American Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 12.27%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, German American Bancorp's payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GABC for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.18 per share, which represents a year-over-year growth rate of 0.32%.
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. 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. With that in mind, GABC 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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This is Why German American Bancorp (GABC) 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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
German American Bancorp in Focus
Headquartered in Jasper, German American Bancorp (GABC - Free Report) is a Finance stock that has seen a price change of -2.46% so far this year. The financial services holding company is currently shelling out a dividend of $0.23 per share, with a dividend yield of 2.42%. This compares to the Banks - Midwest industry's yield of 2.69% and the S&P 500's yield of 1.62%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.92 is up 9.5% from last year. German American Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 12.27%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, German American Bancorp's payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GABC for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.18 per share, which represents a year-over-year growth rate of 0.32%.
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. 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. With that in mind, GABC 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).