Yahoo Finance Are You Looking for a High-Growth Dividend Stock?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Morgan Stanley in Focus
Headquartered in New York, Morgan Stanley (MS) is a Finance stock that has seen a price change of -2.78% so far this year. The investment bank is currently shelling out a dividend of $0.85 per share, with a dividend yield of 3.75%. This compares to the Financial - Investment Bank industry's yield of 0.49% and the S&P 500's yield of 1.61%.
In terms of dividend growth, the company's current annualized dividend of $3.40 is up 4.6% from last year. In the past five-year period, Morgan Stanley has increased its dividend 4 times on a year-over-year basis for an average annual increase of 29.33%. 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, Morgan Stanley's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MS for this fiscal year. The Zacks Consensus Estimate for 2024 is $6.77 per share, which represents a year-over-year growth rate of 23.99%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 MS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Morgan Stanley (MS) : Free Stock Analysis Report
