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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Manulife Financial in Focus
Manulife Financial (MFC) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 8.3% since the start of the year. The financial services company is paying out a dividend of $0.27 per share at the moment, with a dividend yield of 5.68% compared to the Insurance - Life Insurance industry's yield of 0.09% and the S&P 500's yield of 1.76%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.10 is up 8.3% from last year. Manulife Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 9.52%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Manulife's current payout ratio is 47%. This means it paid out 47% of its trailing 12-month EPS as dividend.
MFC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.44 per share, with earnings expected to increase 2.52% from the year ago period.
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. However, not all companies offer 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 MFC 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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Manulife Financial Corp (MFC) : Free Stock Analysis Report
