We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
East West Bancorp in Focus
Based in Pasadena, East West Bancorp (EWBC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 15.86%. Currently paying a dividend of $0.48 per share, the company has a dividend yield of 2.51%. In comparison, the Banks - West industry's yield is 2.53%, while the S&P 500's yield is 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.92 is up 20% from last year. Over the last 5 years, East West Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 15.62%. 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. East West Bancorp's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EWBC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $9.12 per share, with earnings expected to increase 15.15% 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. However, not all companies offer 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, EWBC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
East West Bancorp (EWBC) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
East West Bancorp in Focus
Based in Pasadena, East West Bancorp (EWBC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 15.86%. Currently paying a dividend of $0.48 per share, the company has a dividend yield of 2.51%. In comparison, the Banks - West industry's yield is 2.53%, while the S&P 500's yield is 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.92 is up 20% from last year. Over the last 5 years, East West Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 15.62%. 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. East West Bancorp's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EWBC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $9.12 per share, with earnings expected to increase 15.15% 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. However, not all companies offer 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, EWBC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).