Why Associated Banc-Corp (ASB) is a Top Dividend Stock for Your Portfolio
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Associated Banc-Corp (ASB) is headquartered in Green Bay, and is in the Finance sector. The stock has seen a price change of 1.76% since the start of the year. The bank holding company is currently shelling out a dividend of $0.23 per share, with a dividend yield of 3.78%. This compares to the Banks - Midwest industry's yield of 3.14% and the S&P 500's yield of 1.55%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.92 is up 3.4% from last year. Over the last 5 years, Associated Banc-Corp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.65%. 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. Right now, Associated Banc-Corp's payout ratio is 41%, which means it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, ASB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.48 per share, which represents a year-over-year growth rate of 4.20%.
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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. 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, ASB 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).
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