Yahoo Finance Popular (BPOP) Could Be a Great Choice
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.
Popular in Focus
Based in Hato Rey, Popular (BPOP) is in the Finance sector, and so far this year, shares have seen a price change of 11.59%. The company that runs Banco Popular and other banks in Puerto Rico and the U.S. Is paying out a dividend of $0.62 per share at the moment, with a dividend yield of 2.71% compared to the Banks - Southeast industry's yield of 2.68% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.48 is up 9.3% from last year. Over the last 5 years, Popular has increased its dividend 3 times on a year-over-year basis for an average annual increase of 16.28%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Popular's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
BPOP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $8.31 per share, which represents a year-over-year growth rate of 1.71%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BPOP is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Popular, Inc. (BPOP) : Free Stock Analysis Report
