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.
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.
CB Financial Services in Focus
Based in Carmichaels, CB Financial Services (CBFV) is in the Finance sector, and so far this year, shares have seen a price change of 1.17%. The holding company for Pennsylvania-based Community Bank is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.83% compared to the Banks - Northeast industry's yield of 1.88% and the S&P 500's yield of 1.92%.
Looking at dividend growth, the company's current annualized dividend of $0.96 is up 7.9% from last year. In the past five-year period, CB Financial Services has increased its dividend 2 times on a year-over-year basis for an average annual increase of 2.22%. 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. CB Financial Services's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CBFV expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $2.14 per share, which represents a year-over-year growth rate of 26.63%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CBFV presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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CB Financial Services, Inc. (CBFV): Free Stock Analysis Report
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