Why Heritage Financial (HFWA) is a Great Dividend Stock Right Now

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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.Heritage Financial (HFWA) is headquartered in Olympia, and is in the Finance sector. The stock has seen a price change of 0.12% since the start of the year. The bank holding company is currently shelling out a dividend of $0.24 per share, with a dividend yield of 3.91%. This compares to the Financial - Savings and Loan industry's yield of 2.9% and the S&P 500's yield of 1.47%.Looking at dividend growth, the company's current annualized dividend of $0.96 is up 4.3% from last year. Over the last 5 years, Heritage Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 4.17%. 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. Heritage Financial's current payout ratio is 52%, meaning it paid out 52% of its trailing 12-month EPS as dividend.Looking at this fiscal year, HFWA expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.11 per share, with earnings expected to increase 14.05% from the year ago period.From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that HFWA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>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 Heritage Financial Corporation (HFWA): 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