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Cullen/Frost Bankers (CFR) 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. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cullen/Frost Bankers in Focus
Cullen/Frost Bankers (CFR - Free Report) is headquartered in San Antonio, and is in the Finance sector. The stock has seen a price change of 12.7% since the start of the year. Currently paying a dividend of $0.87 per share, the company has a dividend yield of 2.45%. In comparison, the Banks - Southwest industry's yield is 1.4%, while the S&P 500's yield is 1.78%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.48 is up 18.4% from last year. In the past five-year period, Cullen/Frost Bankers has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.54%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cullen/Frost's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFR for this fiscal year. The Zacks Consensus Estimate for 2022 is $8.01 per share, representing a year-over-year earnings growth rate of 18.49%.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CFR 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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Cullen/Frost Bankers (CFR) 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. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cullen/Frost Bankers in Focus
Cullen/Frost Bankers (CFR - Free Report) is headquartered in San Antonio, and is in the Finance sector. The stock has seen a price change of 12.7% since the start of the year. Currently paying a dividend of $0.87 per share, the company has a dividend yield of 2.45%. In comparison, the Banks - Southwest industry's yield is 1.4%, while the S&P 500's yield is 1.78%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.48 is up 18.4% from last year. In the past five-year period, Cullen/Frost Bankers has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.54%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cullen/Frost's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFR for this fiscal year. The Zacks Consensus Estimate for 2022 is $8.01 per share, representing a year-over-year earnings growth rate of 18.49%.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CFR 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).