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Why First Community (FCCO) is a Top Dividend Stock for Your Portfolio
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
First Community in Focus
Headquartered in Lexington, First Community (FCCO - Free Report) is a Finance stock that has seen a price change of 10.13% so far this year. The holding company for First Community Bank is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.27% compared to the Banks - Southeast industry's yield of 2.26% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.60 is up 3.4% from last year. First Community has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 5.34%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, First Community's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FCCO expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.28 per share, representing a year-over-year earnings growth rate of 25.97%.
Bottom Line
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that FCCO is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why First Community (FCCO) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
First Community in Focus
Headquartered in Lexington, First Community (FCCO - Free Report) is a Finance stock that has seen a price change of 10.13% so far this year. The holding company for First Community Bank is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.27% compared to the Banks - Southeast industry's yield of 2.26% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.60 is up 3.4% from last year. First Community has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 5.34%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, First Community's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FCCO expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.28 per share, representing a year-over-year earnings growth rate of 25.97%.
Bottom Line
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that FCCO is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).