Yahoo Finance Why Northrim BanCorp (NRIM) 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Northrim BanCorp in Focus
Headquartered in Anchorage, Northrim BanCorp (NRIM) is a Finance stock that has seen a price change of -15.82% so far this year. The holding company for Northrim Bank is paying out a dividend of $0.61 per share at the moment, with a dividend yield of 5.07% compared to the Banks - West industry's yield of 3.22% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $2.44 is up 1.7% from last year. Northrim BanCorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 16.72%. 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, Northrim's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NRIM for this fiscal year. The Zacks Consensus Estimate for 2024 is $5 per share, which represents a year-over-year growth rate of 11.36%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NRIM 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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Northrim BanCorp Inc (NRIM) : Free Stock Analysis Report
