Back to top

Image: Bigstock

Are You Looking for a High-Growth Dividend Stock? Kilroy Realty (KRC) Could Be a Great Choice

Read MoreHide Full Article

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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.

Kilroy Realty in Focus

Headquartered in Los Angeles, Kilroy Realty (KRC - Free Report) is a Finance stock that has seen a price change of -1.34% so far this year. Currently paying a dividend of $0.5 per share, the company has a dividend yield of 3.53%. In comparison, the REIT and Equity Trust - Other industry's yield is 3.58%, while the S&P 500's yield is 1.47%.

In terms of dividend growth, the company's current annualized dividend of $2 is up 1.5% from last year. Over the last 5 years, Kilroy Realty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.60%. 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. Kilroy Realty's current payout ratio is 53%. This means it paid out 53% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for KRC for this fiscal year. The Zacks Consensus Estimate for 2021 is $4.14 per share, representing a year-over-year earnings growth rate of 11.59%.

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.

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, KRC 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).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Kilroy Realty Corporation (KRC) - free report >>

Published in