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Why Community Trust Bancorp (CTBI) 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. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Community Trust Bancorp in Focus
Headquartered in Pikeville, Community Trust Bancorp (CTBI - Free Report) is a Finance stock that has seen a price change of 13.86% so far this year. Currently paying a dividend of $0.46 per share, the company has a dividend yield of 3.68%. In comparison, the Banks - Southeast industry's yield is 2.45%, while the S&P 500's yield is 1.56%.
Looking at dividend growth, the company's current annualized dividend of $1.84 is up 2.2% from last year. In the past five-year period, Community Trust Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.09%. 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. Community Trust Bancorp's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CTBI for this fiscal year. The Zacks Consensus Estimate for 2024 is $4.38 per share, with earnings expected to increase 0.46% 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 must be conscious 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 CTBI 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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Why Community Trust Bancorp (CTBI) 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. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Community Trust Bancorp in Focus
Headquartered in Pikeville, Community Trust Bancorp (CTBI - Free Report) is a Finance stock that has seen a price change of 13.86% so far this year. Currently paying a dividend of $0.46 per share, the company has a dividend yield of 3.68%. In comparison, the Banks - Southeast industry's yield is 2.45%, while the S&P 500's yield is 1.56%.
Looking at dividend growth, the company's current annualized dividend of $1.84 is up 2.2% from last year. In the past five-year period, Community Trust Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.09%. 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. Community Trust Bancorp's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CTBI for this fiscal year. The Zacks Consensus Estimate for 2024 is $4.38 per share, with earnings expected to increase 0.46% 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 must be conscious 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 CTBI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).