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First Financial Bankshares (FFIN) Could Be a Great Choice
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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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
First Financial Bankshares in Focus
Based in Abilene, First Financial Bankshares (FFIN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 16.17%. The commercial banker operating mostly in Texas is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.05% compared to the Banks - Southwest industry's yield of 0.68% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $0.72 is up 1.4% from last year. First Financial Bankshares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 10.69%. 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. First Financial's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FFIN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.52 per share, with earnings expected to increase 9.35% 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.
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 FFIN 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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First Financial Bankshares (FFIN) 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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
First Financial Bankshares in Focus
Based in Abilene, First Financial Bankshares (FFIN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 16.17%. The commercial banker operating mostly in Texas is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.05% compared to the Banks - Southwest industry's yield of 0.68% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $0.72 is up 1.4% from last year. First Financial Bankshares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 10.69%. 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. First Financial's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FFIN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.52 per share, with earnings expected to increase 9.35% 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.
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 FFIN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).