Why First Business Financial Services (FBIZ) is a Great Dividend Stock Right Now

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.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.First Business Financial Services (FBIZ) is headquartered in Madison, and is in the Finance sector. The stock has seen a price change of 9.1% since the start of the year. The bank holding company for First Business Bank and First Business Bank-Milwaukee is paying out a dividend of $0.34 per share at the moment, with a dividend yield of 2.3% compared to the Banks - Midwest industry's yield of 2.59% and the S&P 500's yield of 1.45%.Looking at dividend growth, the company's current annualized dividend of $1.36 is up 17.2% from last year. Over the last 5 years, First Business Financial Services has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.22%. 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. First Business Financial Services's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.Looking at this fiscal year, FBIZ expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $6.21 per share, which represents a year-over-year growth rate of 4.55%.Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 FBIZ is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks