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Are You Looking for a High-Growth Dividend Stock? Principal Financial (PFG) Could Be a Great Choice
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Principal Financial in Focus
Based in Des Moines, Principal Financial (PFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 32.43%. Currently paying a dividend of $0.61 per share, the company has a dividend yield of 3.71%. In comparison, the Financial - Investment Management industry's yield is 1.61%, while the S&P 500's yield is 1.37%.
Looking at dividend growth, the company's current annualized dividend of $2.44 is up 8.9% from last year. Principal Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.80%. 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, Principal Financial's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
PFG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $6.49 per share, with earnings expected to increase 31.38% from the year ago period.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PFG presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Principal Financial (PFG) Could Be a Great Choice
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Principal Financial in Focus
Based in Des Moines, Principal Financial (PFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 32.43%. Currently paying a dividend of $0.61 per share, the company has a dividend yield of 3.71%. In comparison, the Financial - Investment Management industry's yield is 1.61%, while the S&P 500's yield is 1.37%.
Looking at dividend growth, the company's current annualized dividend of $2.44 is up 8.9% from last year. Principal Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.80%. 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, Principal Financial's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
PFG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $6.49 per share, with earnings expected to increase 31.38% from the year ago period.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PFG presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).