Whether through stocks, bonds, ETFs or other types of securities, all investors love to see their portfolios generate significant returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary goal.
While cash flow can come from bond interest or interest from other types of investments, income investors focus on dividends. A dividend is that coveted distribution of a company’s profits paid to shareholders, and investors often view it by its dividend yield, a measure that measures the dividend as a percentage of the current stock price. Numerous academic studies show that dividends are a large part of long-term returns, and in many cases dividend contributions exceed one-third of total returns.
Bankwell Financial Group, Inc. Focus
Bankwell Financial Group, Inc. (BWFG) is headquartered in New Canaan and is in the financial industry. The stock has seen a price change of 53.91% since the start of the year. Currently paying a dividend of $ 0.18 per share, the company has a dividend yield of 2.39%. In comparison, the Banks – Northeast industry returns 2%, while the S&P 500 returns 1.39%.
Looking at the company’s dividend growth, its current annualized dividend of $ 0.72 is up 28.6% from a year ago. Over the past five years, Bankwell Financial Group, Inc. has increased its dividend 4 times year on year for an average annual increase of 21.92%. Going forward, future dividend growth will depend on earnings growth and the payout ratio, which is the proportion of a company’s annual earnings per share that it pays out as dividends. Bankwell Financial Group, Inc.’s current payout ratio is 29%, which means it has paid out 29% of its 12-month EPS as a dividend.
Looking at this fiscal year, BWFG expects solid earnings growth. Zacks’ consensus estimate for 2021 is $ 3.22 per share, with earnings expected to rise 329.33% from the previous year.
Whether it’s dramatically improving earnings from equity investments and reducing overall portfolio risk or offering tax benefits, investors love dividends for a variety of reasons. But not all companies offer quarterly payment.
Large, established companies that have safer earnings are often considered the best dividend options, but it is quite rare to see high growth companies or tech start-ups offering a dividend to their shareholders. During times of rising interest rates, income investors should be aware that high yielding stocks tend to struggle. That said, they can be reassured that BWFG is not only an attractive dividend game, but is also a compelling investment opportunity with a Zacks ranking of # 2 (Buy).
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Bankwell Financial Group, Inc. (BWFG): Free Stock Analysis Report
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