Why First Business Financial Services (FBIZ) is a Great Dividend Stock Right Now

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.Cash flow can come from bond interest, interest from other types of investments, and of course, 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.First Business Financial Services in FocusBased in Madison, First Business Financial Services (FBIZ) is in the Finance sector, and so far this year, shares have seen a price change of 5.1%. Currently paying a dividend of $0.29 per share, the company has a dividend yield of 2.38%. In comparison, the Banks - Midwest industry's yield is 3.44%, while the S&P 500's yield is 1.69%.In terms of dividend growth, the company's current annualized dividend of $1.16 is up 16% from last year. First Business Financial Services has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.70%. 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. First Business Financial Services's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.FBIZ is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.46 per share, representing a year-over-year earnings growth rate of 10.98%.Bottom LineInvestors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 FBIZ is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 First Business Financial Services, Inc. (FBIZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks