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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Based in Los Angeles, Banc of California (BANC) is in the Finance sector, and so far this year, shares have seen a price change of -3.47%. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 2.58%. In comparison, the Banks - Southwest industry's yield is 1.66%, while the S&P 500's yield is 1.42%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 20% from last year. Over the last 5 years, Banc of California has increased its dividend 1 times on a year-over-year basis for an average annual increase of 16.61%. 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. Banc of California's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BANC expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $1.72 per share, which represents a year-over-year growth rate of 27.41%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BANC 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).
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Banc of California, Inc. (BANC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).