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Why M&T Bank Corporation (MTB) is a Top Dividend Stock for Your Portfolio
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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.
M&T Bank Corporation in Focus
Based in Buffalo, M&T Bank Corporation (MTB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 1.71%. The company is currently shelling out a dividend of $1.2 per share, with a dividend yield of 3.07%. This compares to the Banks - Major Regional industry's yield of 3.54% and the S&P 500's yield of 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $4.80 is up 6.7% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.92%. 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. M&T Bank Corporation's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
MTB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $15.07 per share, representing a year-over-year earnings growth rate of 9.20%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 MTB 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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Why M&T Bank Corporation (MTB) is a Top Dividend Stock for Your Portfolio
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.
M&T Bank Corporation in Focus
Based in Buffalo, M&T Bank Corporation (MTB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 1.71%. The company is currently shelling out a dividend of $1.2 per share, with a dividend yield of 3.07%. This compares to the Banks - Major Regional industry's yield of 3.54% and the S&P 500's yield of 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $4.80 is up 6.7% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.92%. 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. M&T Bank Corporation's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
MTB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $15.07 per share, representing a year-over-year earnings growth rate of 9.20%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 MTB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).