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.
Civista Bancshares (CIVB) is headquartered in Sandusky, and is in the Finance sector. The stock has seen a price change of -10.41% since the start of the year. The bank holding company is currently shelling out a dividend of $0.17 per share, with a dividend yield of 3.61%. This compares to the Banks - Midwest industry's yield of 3.47% and the S&P 500's yield of 1.7%.
In terms of dividend growth, the company's current annualized dividend of $0.68 is up 6.3% from last year. Civista Bancshares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 9.33%. 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. Civista Bancshares's current payout ratio is 32%. This means it paid out 32% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CIVB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.35 per share, which represents a year-over-year growth rate of 16.92%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CIVB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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