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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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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Headquartered in Radnor, Lincoln National (LNC - Free Report) is a Finance stock that has seen a price change of 22.48% so far this year. The insurance and retirement business is currently shelling out a dividend of $0.42 per share, with a dividend yield of 2.73%. This compares to the Insurance - Life Insurance industry's yield of 0.59% and the S&P 500's yield of 1.38%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 5% from last year. In the past five-year period, Lincoln National has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.42%. 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. Right now, Lincoln National's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
LNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $9.34 per share, representing a year-over-year earnings growth rate of 109.89%.
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 LNC 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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Are You Looking for a High-Growth Dividend Stock? Lincoln National (LNC) 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. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Headquartered in Radnor, Lincoln National (LNC - Free Report) is a Finance stock that has seen a price change of 22.48% so far this year. The insurance and retirement business is currently shelling out a dividend of $0.42 per share, with a dividend yield of 2.73%. This compares to the Insurance - Life Insurance industry's yield of 0.59% and the S&P 500's yield of 1.38%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 5% from last year. In the past five-year period, Lincoln National has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.42%. 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. Right now, Lincoln National's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
LNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $9.34 per share, representing a year-over-year earnings growth rate of 109.89%.
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 LNC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).