Why United Community Banks (UCB) 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. However, when you're an income investor, your primary focus is generating 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 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.United Community Banks in FocusBased in Greenville, United Community Banks (UCB) is in the Finance sector, and so far this year, shares have seen a price change of 6.99%. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.78% compared to the Banks - Southeast industry's yield of 2.22% and the S&P 500's yield of 1.52%.Looking at dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. In the past five-year period, United Community Banks has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.13%. 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. United Community Banks's current payout ratio is 42%, meaning it paid out 42% of its trailing 12-month EPS as dividend.Looking at this fiscal year, UCB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.52 per share, which represents a year-over-year growth rate of 9.57%.Bottom LineInvestors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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. That said, they can take comfort from the fact that UCB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 United Community Banks, Inc. (UCB): 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