All investors like to earn big returns from their portfolio, whether through stocks, bonds, ETFs, or other types of securities. However, when you are an income investor, your main goal is to generate 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 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.
Riverview Bancorp in brief
Vancouver-based Riverview Bancorp (RVSB – Free Report) is in the finance industry, and so far this year stocks have seen a price change of 42.59%. Riverview Community Bank’s holding company currently pays a dividend of $ 0.05 per share, with a dividend yield of 2.93% compared to the financial industry yield – Savings and Credit of 2.52% and the yield of the S&P 500 of 1.35%.
When it comes to dividend growth, the company’s current annualized dividend of $ 0.22 is up 10% from last year. Over the past five years, Riverview Bancorp has increased its dividend 4 times year over year for an average annual increase of 25.71%. Future dividend growth will depend on earnings growth as well as the payout ratio, which is the proportion of a company’s annual earnings per share that it pays out as dividends. Riverview Bancorp’s current payout ratio is 29%. This means that he paid 29% of his 12-month EPS as a dividend.
In view of this financial year, RVSB expects solid earnings growth. Zacks’ consensus estimate for 2021 is $ 0.88 per share, which represents a year-over-year growth rate of 87.23%.
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. However, not all companies offer quarterly payment.
High-growth companies or tech start-ups, for example, rarely pay a dividend to their shareholders, while larger, more established companies with safer earnings are often seen as the best dividend options. During times of rising interest rates, income investors should be aware that high yielding stocks tend to struggle. With this in mind, RVSB is a compelling investment opportunity. Not only is this a big dividend game, the stock currently sits at Zacks rank of 3 (hold).