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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

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 -2.2% so far this year. The company is currently shelling out a dividend of $0.14 per share, with a dividend yield of 2.84%. This compares to the Banks - Northeast industry's yield of 2.58% and the S&P 500's yield of 1.57%.

Looking at dividend growth, the company's current annualized dividend of $0.58 is up 3.6% from last year. In the past five-year period, SB Financial Group, Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.39%. 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. SB Financial Group's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for SBFG for this fiscal year. The Zacks Consensus Estimate for 2025 is $2 per share, which represents a year-over-year growth rate of 16.96%.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. 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 #1 (Strong Buy).

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SB Financial Group, Inc. (SBFG) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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