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Are You Looking for a High-Growth Dividend Stock? First Business Financial Services (FBIZ) Could Be a Great Choice
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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.
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 Business Financial Services in Focus
Headquartered in Madison, First Business Financial Services (FBIZ - Free Report) is a Finance stock that has seen a price change of 13.84% so far this year. Currently paying a dividend of $0.15 per share, the company has a dividend yield of 2.7%. In comparison, the Banks - Midwest industry's yield is 2.32%, while the S&P 500's yield is 1.93%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.60 is up 7.1% from last year. In the past five-year period, First Business Financial Services has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.41%. 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. Right now, First Business Financial Services's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBIZ expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $2.05 per share, with earnings expected to increase 10.22% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that FBIZ is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? First Business Financial Services (FBIZ) Could Be a Great Choice
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.
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 Business Financial Services in Focus
Headquartered in Madison, First Business Financial Services (FBIZ - Free Report) is a Finance stock that has seen a price change of 13.84% so far this year. Currently paying a dividend of $0.15 per share, the company has a dividend yield of 2.7%. In comparison, the Banks - Midwest industry's yield is 2.32%, while the S&P 500's yield is 1.93%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.60 is up 7.1% from last year. In the past five-year period, First Business Financial Services has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.41%. 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. Right now, First Business Financial Services's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FBIZ expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $2.05 per share, with earnings expected to increase 10.22% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that FBIZ is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).