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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Civista Bancshares in Focus

Headquartered in Sandusky, Civista Bancshares (CIVB) is a Finance stock that has seen a price change of 0.19% so far this year. The bank holding company is paying out a dividend of $0.16 per share at the moment, with a dividend yield of 3.23% compared to the Banks - Midwest industry's yield of 2.77% and the S&P 500's yield of 1.51%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.68 is up 6.3% from last year. Over the last 5 years, Civista Bancshares has increased its dividend 2 times on a year-over-year basis for an average annual increase of 9.51%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Civista Bancshares's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for CIVB for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.21 per share, with earnings expected to increase 9.95% from the year ago period.

Bottom Line

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.

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. With that in mind, CIVB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).

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Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report

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