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Comerica (CMA) is a Top Dividend Stock Right Now: Should You Buy?
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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.
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.
Comerica in Focus
Headquartered in Dallas, Comerica (CMA - Free Report) is a Finance stock that has seen a price change of 5.75% so far this year. Currently paying a dividend of $0.67 per share, the company has a dividend yield of 3.69%. In comparison, the Banks - Major Regional industry's yield is 2.89%, while the S&P 500's yield is 1.91%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.68 is up 45.7% from last year. In the past five-year period, Comerica has increased its dividend 5 times on a year-over-year basis for an average annual increase of 25.63%. 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. Comerica's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
CMA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $8.26 per share, which represents a year-over-year growth rate of 14.72%.
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. But, not every company offers 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. With that in mind, CMA 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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Comerica (CMA) is a Top Dividend Stock Right Now: Should You Buy?
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 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.
Comerica in Focus
Headquartered in Dallas, Comerica (CMA - Free Report) is a Finance stock that has seen a price change of 5.75% so far this year. Currently paying a dividend of $0.67 per share, the company has a dividend yield of 3.69%. In comparison, the Banks - Major Regional industry's yield is 2.89%, while the S&P 500's yield is 1.91%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.68 is up 45.7% from last year. In the past five-year period, Comerica has increased its dividend 5 times on a year-over-year basis for an average annual increase of 25.63%. 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. Comerica's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
CMA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $8.26 per share, which represents a year-over-year growth rate of 14.72%.
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. But, not every company offers 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. With that in mind, CMA 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).