All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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.
Sierra Bancorp (BSRR) is headquartered in Porterville, and is in the Finance sector. The stock has seen a price change of 6.4% since the start of the year. The parent company of Bank of the Sierra is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 3.12% compared to the Banks - West industry's yield of 2.68% and the S&P 500's yield of 1.48%.
Looking at dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. In the past five-year period, Sierra Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 3.93%. 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. Right now, Sierra Bancorp's payout ratio is 38%, which means it paid out 38% of its trailing 12-month EPS as dividend.
BSRR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.95 per share, representing a year-over-year earnings growth rate of 4.61%.
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 must be conscious 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 BSRR is not only an attractive dividend play, but also represents a compelling investment opportunity with a 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
Sierra Bancorp (BSRR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.