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Why Sun Life (SLF) is a Great Dividend Stock Right Now
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
Sun Life in Focus
Sun Life (SLF - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 9.09% since the start of the year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 3.41%. In comparison, the Insurance - Life Insurance industry's yield is 0.4%, while the S&P 500's yield is 1.42%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.65 is up 1% from last year. Over the last 5 years, Sun Life has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.63%. 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 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $4.15 per share, which represents a year-over-year growth rate of 1.22%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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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Why Sun Life (SLF) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
Sun Life in Focus
Sun Life (SLF - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 9.09% since the start of the year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 3.41%. In comparison, the Insurance - Life Insurance industry's yield is 0.4%, while the S&P 500's yield is 1.42%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.65 is up 1% from last year. Over the last 5 years, Sun Life has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.63%. 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 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $4.15 per share, which represents a year-over-year growth rate of 1.22%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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).