Yahoo Finance Why SB Financial Group, Inc. (SBFG) is a Top Dividend Stock for Your Portfolio
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 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.
SB Financial Group, Inc. In Focus
Headquartered in Defiance, SB Financial Group, Inc. (SBFG) is a Finance stock that has seen a price change of -0.35% so far this year. The company is currently shelling out a dividend of $0.13 per share, with a dividend yield of 2.96%. This compares to the Banks - Northeast industry's yield of 2.51% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.50 is up 4.2% from last year. SB Financial Group, Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.79%. 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. Right now, SB Financial Group, Inc.'s payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
SBFG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.77 per share, which represents a year-over-year growth rate of 8.59%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that SBFG is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SB Financial Group, Inc. (SBFG) : Free Stock Analysis Report
