Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
SB Financial Group, Inc. (SBFG) is headquartered in Defiance, and is in the Finance sector. The stock has seen a price change of -9.47% since the start of the year. The company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 3.17% compared to the Banks - Northeast industry's yield of 2.72% and the S&P 500's yield of 1.55%.
Looking at dividend growth, the company's current annualized dividend of $0.60 is up 7.1% from last year. Over the last 5 years, SB Financial Group, Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.81%. 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. SB Financial Group's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SBFG expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.03 per share, representing a year-over-year earnings growth rate of 18.71%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. With that in mind, SBFG is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
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SB Financial Group, Inc. (SBFG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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