Why Silvercrest (SAMG) is a Great Dividend Stock Right Now
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Silvercrest (SAMG) have what i...
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Silvercrest in Focus
Based in New York, Silvercrest (SAMG) is in the Finance sector, and so far this year, shares have seen a price change of 14.04%. The investment company is paying out a dividend of $0.16 per share at the moment, with a dividend yield of 4.29% compared to the Financial - Investment Management industry's yield of 1.55% and the S&P 500's yield of 1.4%.
Looking at dividend growth, the company's current annualized dividend of $0.68 is up 6.3% from last year. Silvercrest has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 7.90%. 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. Silvercrest's current payout ratio is 42%, meaning it paid out 42% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SAMG expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $1.67 per share, representing a year-over-year earnings growth rate of 30.47%.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, SAMG is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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