Yahoo Finance Are You Looking for a High-Growth Dividend Stock?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
BlackRock in Focus
BlackRock (BLK) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of -7.65% since the start of the year. The investment firm is currently shelling out a dividend of $5.1 per share, with a dividend yield of 2.72%. This compares to the Financial - Investment Management industry's yield of 2.98% and the S&P 500's yield of 1.6%.
Looking at dividend growth, the company's current annualized dividend of $20.40 is up 2% from last year. BlackRock has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.21%. 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. BlackRock's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BLK expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $41.26 per share, with earnings expected to increase 9.24% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BLK is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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BlackRock, Inc. (BLK) : Free Stock Analysis Report
