Yahoo Finance Why Southside Bancshares (SBSI) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Southside Bancshares in Focus
Headquartered in Tyler, Southside Bancshares (SBSI) is a Finance stock that has seen a price change of -12.04% so far this year. The holding company for Southside Bank is currently shelling out a dividend of $0.36 per share, with a dividend yield of 5.23%. This compares to the Banks - Southwest industry's yield of 0.91% and the S&P 500's yield of 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.44 is up 1.4% from last year. In the past five-year period, Southside Bancshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.45%. 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. Southside Bancshares's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
SBSI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.86 per share, which represents a year-over-year growth rate of 0.70%.
Bottom Line
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, SBSI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong 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
Southside Bancshares, Inc. (SBSI) : Free Stock Analysis Report
