The financial sector has long been a dividend hunter’s paradise, with many banks, insurance firms and brokerages offering strong dividends. But when investors look toward the sector for these steady payouts, larger firms and the mega-banks are often where they stop their search. That’s a real shame as moving down the ladder into the regional and community banks can bear serious dividend fruit. Our latest Best Dividend Capture Stocks List pick is a prime example of that and is one of the only banks to keep its dividend growing after the Great Recession.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick’s dividend strength is due to its strong operating region and fiscal conservatism. Operating in economically strong regions of the Midwest, including Wisconsin, Illinois and Minnesota, our pick has been able to prosper as these areas have grown economically. Moreover, the firm has expanded across commercial lending, specialized finance and other loan products. The advantage lies in the firm’s operating region and history, which have instilled a strong sense of conservatism in its lending practices, providing a far less risky profile than some of its rivals.
Growth can be had from the firm’s continued willingness to use M&A to expand its footprint in its key areas as well as moving into private banking and wealth management. These areas feature higher margins and have helped our pick boost its revenues. Moreover, a dash of technology has helped to retain customers and boost its profitability internally.
As such, investors have continued to support shares of our pick, and it’s become a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, December 2, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 7.4 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our regional bank pick could be a lucrative option.
