Why Home BancShares (HOMB) is a Great Dividend Stock Right Now

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.Home BancShares in FocusHeadquartered in Conway, Home BancShares (HOMB) is a Finance stock that has seen a price change of 7.42% so far this year. The bank holding company is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.57% compared to the Banks - Southeast industry's yield of 2.28% and the S&P 500's yield of 1.51%.Looking at dividend growth, the company's current annualized dividend of $0.78 is up 4% from last year. Home BancShares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 9.70%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Home BancShares's current payout ratio is 39%. This means it paid out 39% of its trailing 12-month EPS as dividend.HOMB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.17 per share, which represents a year-over-year growth rate of 7.96%.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.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 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 HOMB 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 +24.1% 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 Home BancShares, Inc. (HOMB): 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