We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Prosperity Bancshares (PB) is a Top Dividend Stock for Your Portfolio
Read MoreHide Full Article
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Prosperity Bancshares in Focus
Based in Houston, Prosperity Bancshares (PB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.38%. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.92%. In comparison, the Banks - Southwest industry's yield is 1.4%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $2.08 is up 4.5% from last year. Over the last 5 years, Prosperity Bancshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.78%. 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. Prosperity Bancshares's current payout ratio is 38%, meaning it paid out 38% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for PB for this fiscal year. The Zacks Consensus Estimate for 2022 is $5.77 per share, representing a year-over-year earnings growth rate of 3.04%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PB 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).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Prosperity Bancshares (PB) is a Top Dividend Stock for Your Portfolio
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Prosperity Bancshares in Focus
Based in Houston, Prosperity Bancshares (PB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.38%. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.92%. In comparison, the Banks - Southwest industry's yield is 1.4%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $2.08 is up 4.5% from last year. Over the last 5 years, Prosperity Bancshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.78%. 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. Prosperity Bancshares's current payout ratio is 38%, meaning it paid out 38% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for PB for this fiscal year. The Zacks Consensus Estimate for 2022 is $5.77 per share, representing a year-over-year earnings growth rate of 3.04%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PB 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).