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FS Bancorp (FSBW) is a Top Dividend Stock Right Now: Should You Buy?
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
FS Bancorp in Focus
Based in Mountlake Terrace, FS Bancorp (FSBW - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.42%. The bank holding company is currently shelling out a dividend of $0.25 per share, with a dividend yield of 2.78%. This compares to the Banks - West industry's yield of 2.53% and the S&P 500's yield of 1.63%.
Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 11.1% from last year. In the past five-year period, FS Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.26%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. FS Bancorp's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FSBW for this fiscal year. The Zacks Consensus Estimate for 2023 is $4.78 per share, with earnings expected to increase 29.19% from the year ago period.
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. That said, they can take comfort from the fact that FSBW is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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FS Bancorp (FSBW) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
FS Bancorp in Focus
Based in Mountlake Terrace, FS Bancorp (FSBW - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.42%. The bank holding company is currently shelling out a dividend of $0.25 per share, with a dividend yield of 2.78%. This compares to the Banks - West industry's yield of 2.53% and the S&P 500's yield of 1.63%.
Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 11.1% from last year. In the past five-year period, FS Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.26%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. FS Bancorp's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FSBW for this fiscal year. The Zacks Consensus Estimate for 2023 is $4.78 per share, with earnings expected to increase 29.19% from the year ago period.
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. That said, they can take comfort from the fact that FSBW is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).