Mercantile Bank (MBWM) is a Top Dividend Stock Right Now: Should You Buy?

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.Mercantile Bank (MBWM) is headquartered in Grand Rapids, and is in the Finance sector. The stock has seen a price change of 8.65% since the start of the year. The holding company for Mercantile Bank of Michigan is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 3.14% compared to the Banks - Midwest industry's yield of 2.94% and the S&P 500's yield of 1.49%.Looking at dividend growth, the company's current annualized dividend of $1.52 is up 7% from last year. Over the last 5 years, Mercantile Bank has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.33%. 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. Mercantile Bank's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.Looking at this fiscal year, MBWM expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $5.23 per share, with earnings expected to increase 6.09% from the year ago period.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 its 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 MBWM is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mercantile Bank Corporation (MBWM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks