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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lakeland Financial (LKFN) is headquartered in Warsaw, and is in the Finance sector. The stock has seen a price change of -5.58% since the start of the year. The holding company for Lake City Bank is paying out a dividend of $0.50 per share at the moment, with a dividend yield of 3.08% compared to the Banks - Midwest industry's yield of 2.91% and the S&P 500's yield of 1.53%.
Looking at dividend growth, the company's current annualized dividend of $2.00 is up 4.2% from last year. Over the last 5 years, Lakeland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.83%. 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. Lakeland Financial's current payout ratio is 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for LKFN for this fiscal year. The Zacks Consensus Estimate for 2025 is $3.76 per share, representing a year-over-year earnings growth rate of 8.36%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers its 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, LKFN 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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Lakeland Financial Corporation (LKFN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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