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Community Bank With 7 Years Dividend Growth Added to Best Dividend Stocks List

Abhishek Gupte Apr 04, 2018


Dividend.com has added a community bank to the Best Dividend Stocks List and removed a global logistics and transportation firm from the list.

Rising rates are often seen as a major hindrance for many sectors of the market. The problem is higher rates, courtesy of the Federal Reserve, make borrowing more costly. However, for some segments of the market, higher rates turn into higher profits. And that includes our new community bank pick.

Benefiting from its strong regional focus, our pick recently recorded one of its best operating years in its 175-year history, driven by solid commercial loan underwriting, strong investment growth and the ability to realize higher net interest margins. Banks make money on the difference between what it charges for loans and what it gives customers on their deposits. And, lately, that difference has been in favor of the banks.

This continued strength has allowed our new community bank pick to be a steady and growing dividend payer throughout its history, which includes plenty of annual special dividend payments in recent years.

But our pick isn’t done yet. Thanks to both tax reform and changes to the Dodd-Frank Act, our community bank is set to surge even further. As a domestic small-cap, our bank is set to receive the maximum benefit from lower taxes. Meanwhile, less regulation will free up capital constraints and allow it to better compete. What that all means is that our pick has the goods to keep growing and increasing its dividend even further.

To summarize, here are five reasons why you should own this stock:

  1. Regional bank in an affluent section of the U.S. Northeast that has allowed it to grow assets to nearly $10 billion.
  2. Long 175-year operating history and has paid a dividend every quarter since its NYSE listing in 2003.
  3. A focus on higher-margined commercial and construction loans tied to physical assets/real estate.
  4. Grown its dividends for the last seven years, with the most recent special payout being rolled out late last year.
  5. Low payout ratio of 43.5% and healthy yield of 3.18%.

Soft Removal of a Transportation/Logistics Firm From the Best Dividend Stocks List

It’s time to say goodbye to our logistics Best Dividend Stocks List’s pick. Over the last few months, rivals – including one of its chief customers – have stolen much of the firm’s thunder with regard to shipping the rising volume of online goods. As a result, the firm’s relative strength score has slipped below acceptable ranges for our Best Dividend Stocks List. In addition, the drop in share price over the last couple of months has pushed up the dividend yield of the firm, forcing its yield attractiveness score to fall below the optimal range. With that lack of momentum and a substantial rise in yield, we’re forced to soft remove the firm from our coveted list. However, the firm still scores high in other DARS metrics and still provides potential for income seekers.

Find out which ‘tech hero’ made it to our Best Dividend Stocks List here.

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