Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor’s dream. 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 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.
Hanmi Financial in Focus
Based in Los Angeles, Hanmi Financial (HAFC – Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.84%. The bank holding company is paying out a dividend of $0.27 per share at the moment, with a dividend yield of 4.45% compared to the Banks – West industry’s yield of 2.77% and the S&P 500’s yield of 1.53%.
Looking at dividend growth, the company’s current annualized dividend of $1.08 is up 8% from last year. In the past five-year period, Hanmi Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 22.92%. 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. Hanmi Financial’s current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HAFC for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.60 per share, which represents a year-over-year growth rate of 26.83%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 HAFC 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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