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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 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.
Morgan Stanley in Focus
Morgan Stanley (MS - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 14.82% since the start of the year. The investment bank is currently shelling out a dividend of $0.77 per share, with a dividend yield of 3.18%. This compares to the Financial - Investment Bank industry's yield of 0.42% and the S&P 500's yield of 1.61%.
In terms of dividend growth, the company's current annualized dividend of $3.10 is up 5.1% from last year. Morgan Stanley has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 27.74%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Morgan Stanley's current payout ratio is 49%, meaning it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MS for this fiscal year. The Zacks Consensus Estimate for 2023 is $7.18 per share, representing a year-over-year earnings growth rate of 12.89%.
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. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MS 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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Morgan Stanley (MS) 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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Morgan Stanley in Focus
Morgan Stanley (MS - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 14.82% since the start of the year. The investment bank is currently shelling out a dividend of $0.77 per share, with a dividend yield of 3.18%. This compares to the Financial - Investment Bank industry's yield of 0.42% and the S&P 500's yield of 1.61%.
In terms of dividend growth, the company's current annualized dividend of $3.10 is up 5.1% from last year. Morgan Stanley has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 27.74%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Morgan Stanley's current payout ratio is 49%, meaning it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MS for this fiscal year. The Zacks Consensus Estimate for 2023 is $7.18 per share, representing a year-over-year earnings growth rate of 12.89%.
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. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MS 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).