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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Sun Life in Focus
Based in Toronto, Sun Life (SLF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 5.24%. The financial services company is paying out a dividend of $0.58 per share at the moment, with a dividend yield of 4.25% compared to the Insurance - Life Insurance industry's yield of 0.07% and the S&P 500's yield of 1.54%.
Looking at dividend growth, the company's current annualized dividend of $2.32 is up 4.9% from last year. Over the last 5 years, Sun Life has increased its dividend 3 times on a year-over-year basis for an average annual increase of 9.76%. 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. Sun Life's current payout ratio is 48%. This means it paid out 48% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.09 per share, which represents a year-over-year growth rate of 8.07%.
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 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 SLF 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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Sun Life (SLF) 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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Sun Life in Focus
Based in Toronto, Sun Life (SLF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 5.24%. The financial services company is paying out a dividend of $0.58 per share at the moment, with a dividend yield of 4.25% compared to the Insurance - Life Insurance industry's yield of 0.07% and the S&P 500's yield of 1.54%.
Looking at dividend growth, the company's current annualized dividend of $2.32 is up 4.9% from last year. Over the last 5 years, Sun Life has increased its dividend 3 times on a year-over-year basis for an average annual increase of 9.76%. 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. Sun Life's current payout ratio is 48%. This means it paid out 48% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.09 per share, which represents a year-over-year growth rate of 8.07%.
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 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 SLF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).