Income investors focus on generating consistent cash flow from their investments, with dividends being a key component. A dividend is a distribution of a company’s earnings to shareholders, typically measured as a percentage of the current stock price. Studies show that dividends play a significant role in long-term returns, often exceeding one-third of total returns.
First Bancorp, based in San Juan and part of the Finance sector, has seen a 10.88% price change in its shares this year. The company currently pays a dividend of $0.16 per share, resulting in a dividend yield of 3.51%. Compared to the industry average of 2.68% and the S&P 500’s yield of 1.58%, First Bancorp’s dividend yield is attractive.
The company has a strong track record of dividend growth, with an annualized dividend of $0.64, marking a 14.3% increase from the previous year. Over the past 5 years, First Bancorp has raised its dividend 5 times, with an average annual increase of 41.87%. Future dividend growth will depend on earnings growth and payout ratio, which currently stands at 36%.
Analysts expect solid earnings growth for First Bancorp, with a projected EPS of $1.77 for 2024, indicating a year-over-year growth rate of 3.51%. Dividends offer various benefits to investors, including boosting stock investing profits, reducing portfolio risk, and providing tax advantages. While not all companies offer dividends, First Bancorp stands out as an attractive dividend play and a compelling investment opportunity, with a Zacks Rank of #2 (Buy).