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Why Community Trust Bancorp (CTBI) is a Great Dividend Stock Right Now
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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.
Community Trust Bancorp in Focus
Based in Pikeville, Community Trust Bancorp (CTBI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 9.51%. Currently paying a dividend of $0.46 per share, the company has a dividend yield of 3.83%. In comparison, the Banks - Southeast industry's yield is 2.48%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.84 is up 2.2% from last year. Over the last 5 years, Community Trust Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.09%. 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. Community Trust Bancorp's current payout ratio is 43%, meaning 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
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CTBI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Why Community Trust Bancorp (CTBI) is a Great Dividend Stock Right Now
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.
Community Trust Bancorp in Focus
Based in Pikeville, Community Trust Bancorp (CTBI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 9.51%. Currently paying a dividend of $0.46 per share, the company has a dividend yield of 3.83%. In comparison, the Banks - Southeast industry's yield is 2.48%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.84 is up 2.2% from last year. Over the last 5 years, Community Trust Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.09%. 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. Community Trust Bancorp's current payout ratio is 43%, meaning 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
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CTBI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).