Are You Looking for a High-Growth Dividend Stock?

Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 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.

Sierra Bancorp in Focus

Based in Porterville, Sierra Bancorp (BSRR Quick QuoteBSRR – Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 6.29%. The parent company of Bank of the Sierra is currently shelling out a dividend of $0.25 per share, with a dividend yield of 3.25%. This compares to the Banks – West industry’s yield of 2.77% and the S&P 500’s yield of 1.53%.

Taking a look at the company’s dividend growth, its current annualized dividend of $1 is up 6.4% from last year. Sierra Bancorp has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.93%. 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. Right now, Sierra Bancorp’s payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.

BSRR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.95 per share, representing a year-over-year earnings growth rate of 4.61%.

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.

For instance, it’s a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It’s more common to see larger companies with more established profits give out dividends. 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 BSRR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).