Why Tompkins Financial (TMP) is a Top Dividend Stock for Your Portfolio

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, 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.Tompkins Financial in FocusTompkins Financial (TMP) is headquartered in Ithaca, and is in the Finance sector. The stock has seen a price change of -4.81% since the start of the year. Currently paying a dividend of $0.62 per share, the company has a dividend yield of 3.84%. In comparison, the Banks - Northeast industry's yield is 2.81%, while the S&P 500's yield is 1.52%.In terms of dividend growth, the company's current annualized dividend of $2.48 is up 1.6% from last year. In the past five-year period, Tompkins Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 3.89%. 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. Tompkins's current payout ratio is 48%. This means it paid out 48% of its trailing 12-month EPS as dividend.Earnings growth looks solid for TMP for this fiscal year. The Zacks Consensus Estimate for 2025 is $5.58 per share, representing a year-over-year earnings growth rate of 12.27%.Bottom LineInvestors 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.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. 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 TMP is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention. See them 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 Tompkins Financial Corporation (TMP): 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