All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Guaranty Bancshares Inc. (GNTY) is headquartered in Addison, and is in the Finance sector. The stock has seen a price change of 32.02% since the start of the year. Currently paying a dividend of $0.25 per share, the company has a dividend yield of 2.19%. In comparison, the Banks - Southwest industry's yield is 1.28%, while the S&P 500's yield is 1.53%.
Looking at dividend growth, the company's current annualized dividend of $1.00 is up 4.2% from last year. Over the last 5 years, Guaranty Bancshares Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.50%. 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. Guaranty Bancshares's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GNTY expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.30 per share, which represents a year-over-year growth rate of 20.44%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GNTY 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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Guaranty Bancshares Inc. (GNTY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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