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Are You Looking for a High-Growth Dividend Stock? Lincoln National (LNC) Could Be a Great Choice
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Lincoln National (LNC - Free Report) is headquartered in Radnor, and is in the Finance sector. The stock has seen a price change of 25.44% since the start of the year. The insurance and retirement business is currently shelling out a dividend of $0.42 per share, with a dividend yield of 2.66%. This compares to the Insurance - Life Insurance industry's yield of 0.56% and the S&P 500's yield of 1.34%.
In terms of dividend growth, the company's current annualized dividend of $1.68 is up 5% from last year. Lincoln National has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.92%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Lincoln National's current payout ratio is 44%. This means it paid out 44% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for LNC for this fiscal year. The Zacks Consensus Estimate for 2021 is $9.15 per share, with earnings expected to increase 105.62% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful 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 LNC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Lincoln National (LNC) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Lincoln National (LNC - Free Report) is headquartered in Radnor, and is in the Finance sector. The stock has seen a price change of 25.44% since the start of the year. The insurance and retirement business is currently shelling out a dividend of $0.42 per share, with a dividend yield of 2.66%. This compares to the Insurance - Life Insurance industry's yield of 0.56% and the S&P 500's yield of 1.34%.
In terms of dividend growth, the company's current annualized dividend of $1.68 is up 5% from last year. Lincoln National has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.92%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Lincoln National's current payout ratio is 44%. This means it paid out 44% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for LNC for this fiscal year. The Zacks Consensus Estimate for 2021 is $9.15 per share, with earnings expected to increase 105.62% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful 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 LNC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).