Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 Eau Claire, Citizens Community Bancorp, Inc. (CZWI) is in the Finance sector, and so far this year, shares have seen a price change of 14.53%. The company is currently shelling out a dividend of $0.10 per share, with a dividend yield of 2.06%. This compares to the Financial - Savings and Loan industry's yield of 2.51% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $0.42 is up 16.7% from last year. Over the last 5 years, Citizens Community Bancorp, Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.77%. 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. Citizens Community Bancorp's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.
CZWI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $1.81 per share, with earnings expected to increase 23.97% from the year ago period.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CZWI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Citizens Community Bancorp, Inc. (CZWI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).