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Why The PNC Financial Services Group, Inc (PNC) is a Top Dividend Stock for Your Portfolio
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
The PNC Financial Services Group, Inc in Focus
The PNC Financial Services Group, Inc (PNC - Free Report) is headquartered in Pittsburgh, and is in the Finance sector. The stock has seen a price change of -12.71% since the start of the year. The company is currently shelling out a dividend of $1.5 per share, with a dividend yield of 4.35%. This compares to the Banks - Major Regional industry's yield of 3.41% and the S&P 500's yield of 1.7%.
Looking at dividend growth, the company's current annualized dividend of $6 is up 4.3% from last year. In the past five-year period, The PNC Financial Services Group, Inc has increased its dividend 4 times on a year-over-year basis for an average annual increase of 13.08%. 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. The PNC Financial Services Group, Inc's current payout ratio is 43%, meaning it paid out 43% of its trailing 12-month EPS as dividend.
PNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $14.66 per share, representing a year-over-year earnings growth rate of 5.01%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PNC 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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Why The PNC Financial Services Group, Inc (PNC) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
The PNC Financial Services Group, Inc in Focus
The PNC Financial Services Group, Inc (PNC - Free Report) is headquartered in Pittsburgh, and is in the Finance sector. The stock has seen a price change of -12.71% since the start of the year. The company is currently shelling out a dividend of $1.5 per share, with a dividend yield of 4.35%. This compares to the Banks - Major Regional industry's yield of 3.41% and the S&P 500's yield of 1.7%.
Looking at dividend growth, the company's current annualized dividend of $6 is up 4.3% from last year. In the past five-year period, The PNC Financial Services Group, Inc has increased its dividend 4 times on a year-over-year basis for an average annual increase of 13.08%. 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. The PNC Financial Services Group, Inc's current payout ratio is 43%, meaning it paid out 43% of its trailing 12-month EPS as dividend.
PNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $14.66 per share, representing a year-over-year earnings growth rate of 5.01%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PNC 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).