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Why First Commonwealth Financial (FCF) is a Top Dividend Stock for Your Portfolio
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
First Commonwealth Financial in Focus
First Commonwealth Financial (FCF - Free Report) is headquartered in Indiana, and is in the Finance sector. The stock has seen a price change of 13.03% since the start of the year. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 3.04%. In comparison, the Banks - Northeast industry's yield is 2.51%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 1.1% from last year. First Commonwealth Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.60%. 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. First Commonwealth Financial's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
FCF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.72 per share, representing a year-over-year earnings growth rate of 24.64%.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FCF 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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Why First Commonwealth Financial (FCF) 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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
First Commonwealth Financial in Focus
First Commonwealth Financial (FCF - Free Report) is headquartered in Indiana, and is in the Finance sector. The stock has seen a price change of 13.03% since the start of the year. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 3.04%. In comparison, the Banks - Northeast industry's yield is 2.51%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 1.1% from last year. First Commonwealth Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.60%. 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. First Commonwealth Financial's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
FCF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.72 per share, representing a year-over-year earnings growth rate of 24.64%.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FCF 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).