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This is Why Lincoln National (LNC) is a Great Dividend Stock
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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Based in Radnor, Lincoln National (LNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -16.23%. The insurance and retirement business is currently shelling out a dividend of $0.45 per share, with a dividend yield of 3.15%. This compares to the Insurance - Life Insurance industry's yield of 0.88% and the S&P 500's yield of 1.52%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.80 is up 7.1% from last year. Over the last 5 years, Lincoln National has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.34%. 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. Lincoln National's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for LNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $9.80 per share, representing a year-over-year earnings growth rate of 19.51%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, LNC 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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This is Why Lincoln National (LNC) is a Great Dividend Stock
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Lincoln National in Focus
Based in Radnor, Lincoln National (LNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -16.23%. The insurance and retirement business is currently shelling out a dividend of $0.45 per share, with a dividend yield of 3.15%. This compares to the Insurance - Life Insurance industry's yield of 0.88% and the S&P 500's yield of 1.52%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.80 is up 7.1% from last year. Over the last 5 years, Lincoln National has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.34%. 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. Lincoln National's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for LNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $9.80 per share, representing a year-over-year earnings growth rate of 19.51%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, LNC 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).