Are You Looking for a High-Growth Dividend Stock?

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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 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.

Fulton Financial (FULT) is headquartered in Lancaster, and is in the Finance sector. The stock has seen a price change of 15.88% since the start of the year. The financial holding company is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 3.39% compared to the Banks - Northeast industry's yield of 2.18% and the S&P 500's yield of 1.42%.

Looking at dividend growth, the company's current annualized dividend of $0.76 is up 4.1% from last year. Over the last 5 years, Fulton Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.25%. 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. Fulton Financial's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FULT expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $2.22 per share, representing a year-over-year earnings growth rate of 2.78%.

Investors 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.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 FULT is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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