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German American Bancorp (GABC) Could Be a Great Choice
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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 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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Based in Jasper, German American Bancorp (GABC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.92%. The financial services holding company is paying out a dividend of $0.23 per share at the moment, with a dividend yield of 2.41% compared to the Banks - Midwest industry's yield of 2.97% and the S&P 500's yield of 1.79%.
In terms of dividend growth, the company's current annualized dividend of $0.92 is up 9.5% from last year. In the past five-year period, German American Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.73%. 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. German American Bancorp's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
GABC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.25 per share, with earnings expected to increase 2.52% from the year ago period.
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. 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 GABC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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German American Bancorp (GABC) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Based in Jasper, German American Bancorp (GABC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.92%. The financial services holding company is paying out a dividend of $0.23 per share at the moment, with a dividend yield of 2.41% compared to the Banks - Midwest industry's yield of 2.97% and the S&P 500's yield of 1.79%.
In terms of dividend growth, the company's current annualized dividend of $0.92 is up 9.5% from last year. In the past five-year period, German American Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.73%. 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. German American Bancorp's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
GABC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.25 per share, with earnings expected to increase 2.52% from the year ago period.
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. 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 GABC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).