Yahoo Finance Are You Looking for a High-Growth Dividend Stock?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Shinhan Financial in Focus
Based in Seoul, Shinhan Financial (SHG) is in the Finance sector, and so far this year, shares have seen a price change of 10.92%. The financial services company is currently shelling out a dividend of $0.31 per share, with a dividend yield of 3.59%. This compares to the Banks - Foreign industry's yield of 4.66% and the S&P 500's yield of 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.22 is up 31.6% from last year. Shinhan Financial has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 4.62%. 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. Shinhan Financial's current payout ratio is 20%. This means it paid out 20% of its trailing 12-month EPS as dividend.
SHG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $6.21 per share, with earnings expected to increase 0.81% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, SHG 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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Shinhan Financial Group Co Ltd (SHG) : Free Stock Analysis Report
