Prosperity Bancshares (PB) Could Be a Great Choice

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 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.Prosperity Bancshares in FocusProsperity Bancshares (PB) is headquartered in Houston, and is in the Finance sector. The stock has seen a price change of 5.45% since the start of the year. Currently paying a dividend of $0.58 per share, the company has a dividend yield of 2.92%. In comparison, the Banks - Southwest industry's yield is 0.66%, while the S&P 500's yield is 1.48%.Looking at dividend growth, the company's current annualized dividend of $2.32 is up 2.7% from last year. Prosperity Bancshares has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.99%. 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, Prosperity Bancshares's payout ratio is 45%, which means it paid out 45% of its trailing 12-month EPS as dividend.PB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.78 per share, with earnings expected to increase 13.11% from the year ago period.Bottom LineFrom greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PB 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).5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Prosperity Bancshares, Inc. (PB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks