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Independent Bank (IBCP) is a Top Dividend Stock Right Now: Should You Buy?
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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Independent Bank in Focus
Independent Bank (IBCP - Free Report) is headquartered in Grand Rapids, and is in the Finance sector. The stock has seen a price change of 20.98% since the start of the year. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.05% compared to the Banks - Midwest industry's yield of 3.34% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 4.3% from last year. Independent Bank has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.50%. 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. Independent Bank's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IBCP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.96 per share, with earnings expected to increase 1.02% 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. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, IBCP 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).
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Independent Bank (IBCP) is a Top Dividend Stock Right Now: Should You Buy?
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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Independent Bank in Focus
Independent Bank (IBCP - Free Report) is headquartered in Grand Rapids, and is in the Finance sector. The stock has seen a price change of 20.98% since the start of the year. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.05% compared to the Banks - Midwest industry's yield of 3.34% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 4.3% from last year. Independent Bank has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.50%. 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. Independent Bank's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IBCP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.96 per share, with earnings expected to increase 1.02% 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. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, IBCP 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).