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The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock Right Now: Should You Buy?
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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 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.
The Bank of New York Mellon Corporation in Focus
Based in New York, The Bank of New York Mellon Corporation (BK - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 20.5%. The company is currently shelling out a dividend of $0.34 per share, with a dividend yield of 2.66%. This compares to the Banks - Major Regional industry's yield of 2.62% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $1.36 is up 9.7% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.62%. 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, The Bank of New York Mellon Corporation's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $4.16 per share, with earnings expected to increase 3.74% 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BK 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).
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The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock Right Now: Should You Buy?
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.
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.
The Bank of New York Mellon Corporation in Focus
Based in New York, The Bank of New York Mellon Corporation (BK - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 20.5%. The company is currently shelling out a dividend of $0.34 per share, with a dividend yield of 2.66%. This compares to the Banks - Major Regional industry's yield of 2.62% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $1.36 is up 9.7% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.62%. 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, The Bank of New York Mellon Corporation's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $4.16 per share, with earnings expected to increase 3.74% 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BK 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).