Why Brookline Bancorp (BRKL) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Brookline Bancorp in Focus
Brookline Bancorp (BRKL) is headquartered in Boston, and is in the Finance sector. The stock has seen a price change of -4.95% since the start of the year. The bank holding company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 4.01% compared to the Financial - Savings and Loan industry's yield of 2.81% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.54 is up 3.8% from last year. In the past five-year period, Brookline Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.74%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Brookline's payout ratio is 38%, which means it paid out 38% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BRKL for this fiscal year. The Zacks Consensus Estimate for 2023 is $1.46 per share, which represents a year-over-year growth rate of 1.39%.
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. With that in mind, BRKL is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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
Brookline Bancorp, Inc. (BRKL) : Free Stock Analysis Report
To read this article on Zacks.com click here.