ConnectOne Bancorp (CNOB) Could Be a Great Choice

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Englewood Cliffs, ConnectOne Bancorp (CNOB) is in the Finance sector, and so far this year, shares have seen a price change of 21.01%. Currently paying a dividend of $0.19 per share, the company has a dividend yield of 2.46%. In comparison, the Banks - Northeast industry's yield is 2.19%, while the S&P 500's yield is 1.34%.

Looking at dividend growth, the company's current annualized dividend of $0.78 is up 8.3% from last year. Over the last 5 years, ConnectOne Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 17.00%. 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. ConnectOne's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.

CNOB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $3.26 per share, representing a year-over-year earnings growth rate of 23.48%.

Investors 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CNOB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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