Norwood Financial Corp. (NWFL) Could Be a Great Choice

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.Headquartered in Honesdale, Norwood Financial Corp. (NWFL) is a Finance stock that has seen a price change of -6.56% so far this year. The company is currently shelling out a dividend of $0.31 per share, with a dividend yield of 4.88%. This compares to the Banks - Northeast industry's yield of 2.62% and the S&P 500's yield of 1.49%.Looking at dividend growth, the company's current annualized dividend of $1.24 is up 3.3% from last year. Over the last 5 years, Norwood Financial Corp. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.67%. 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. Norwood Financial's current payout ratio is 57%, meaning it paid out 57% of its trailing 12-month EPS as dividend.NWFL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.68 per share, which represents a year-over-year growth rate of 38.86%.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.High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, NWFL 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).Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>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 Norwood Financial Corp. (NWFL): 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