Why Home Bancorp (HBCP) 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.Home Bancorp in FocusHome Bancorp (HBCP) is headquartered in Lafayette, and is in the Finance sector. The stock has seen a price change of 11.51% since the start of the year. Currently paying a dividend of $0.27 per share, the company has a dividend yield of 2.1%. In comparison, the Banks - Southeast industry's yield is 2.45%, while the S&P 500's yield is 1.6%.Taking a look at the company's dividend growth, its current annualized dividend of $1.08 is up 6.9% from last year. Over the last 5 years, Home Bancorp has increased its dividend 3 times on a year-over-year basis for an average annual increase of 4.07%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Home Bancorp's payout ratio is 23%, which means it paid out 23% of its trailing 12-month EPS as dividend.HBCP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.05 per share, which represents a year-over-year growth rate of 10.75%.Bottom LineInvestors 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.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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HBCP 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).Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>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 Home Bancorp, Inc. (HBCP): 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