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Why First Bancorp (FBP) is a Great Dividend Stock Right Now
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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. But 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First Bancorp in Focus
Based in San Juan, First Bancorp (FBP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 10.88%. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 3.51%. In comparison, the Banks - Southeast industry's yield is 2.68%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.64 is up 14.3% from last year. Over the last 5 years, First Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 41.87%. 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, First Bancorp's payout ratio is 36%, which means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.77 per share, which represents a year-over-year growth rate of 3.51%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 FBP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why First Bancorp (FBP) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First Bancorp in Focus
Based in San Juan, First Bancorp (FBP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 10.88%. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 3.51%. In comparison, the Banks - Southeast industry's yield is 2.68%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.64 is up 14.3% from last year. Over the last 5 years, First Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 41.87%. 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, First Bancorp's payout ratio is 36%, which means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.77 per share, which represents a year-over-year growth rate of 3.51%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 FBP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).