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Why First Mid Bancshares (FMBH) is a Top Dividend Stock for Your Portfolio
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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.
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.
First Mid Bancshares in Focus
Based in Mattoon, First Mid Bancshares (FMBH - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -12.3%. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.97% compared to the Banks - Northeast industry's yield of 2.74% and the S&P 500's yield of 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.96 is up 2.1% from last year. Over the last 5 years, First Mid Bancshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 4.04%. 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. First Mid Bancshares's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMBH expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.61 per share, representing a year-over-year earnings growth rate of 3.74%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide 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. That said, they can take comfort from the fact that FMBH 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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Why First Mid Bancshares (FMBH) is a Top Dividend Stock for Your Portfolio
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.
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.
First Mid Bancshares in Focus
Based in Mattoon, First Mid Bancshares (FMBH - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -12.3%. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.97% compared to the Banks - Northeast industry's yield of 2.74% and the S&P 500's yield of 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.96 is up 2.1% from last year. Over the last 5 years, First Mid Bancshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 4.04%. 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. First Mid Bancshares's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMBH expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.61 per share, representing a year-over-year earnings growth rate of 3.74%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide 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. That said, they can take comfort from the fact that FMBH is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).