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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Home BancShares in Focus
Home BancShares (HOMB - Free Report) is headquartered in Conway, and is in the Finance sector. The stock has seen a price change of 1.18% since the start of the year. The bank holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3.04% compared to the Banks - Southeast industry's yield of 2.55% and the S&P 500's yield of 1.61%.
Looking at dividend growth, the company's current annualized dividend of $0.78 is up 8.3% from last year. Home BancShares has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.21%. 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, Home BancShares's payout ratio is 37%, which means it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.07 per share, which represents a year-over-year growth rate of 4.02%.
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.
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. With that in mind, HOMB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Home BancShares (HOMB) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Home BancShares in Focus
Home BancShares (HOMB - Free Report) is headquartered in Conway, and is in the Finance sector. The stock has seen a price change of 1.18% since the start of the year. The bank holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3.04% compared to the Banks - Southeast industry's yield of 2.55% and the S&P 500's yield of 1.61%.
Looking at dividend growth, the company's current annualized dividend of $0.78 is up 8.3% from last year. Home BancShares has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.21%. 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, Home BancShares's payout ratio is 37%, which means it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HOMB expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.07 per share, which represents a year-over-year growth rate of 4.02%.
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.
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. With that in mind, HOMB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).