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Comerica Incorporated (CMA) Could Be a Great Choice
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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Comerica Incorporated in Focus
Based in Dallas, Comerica Incorporated (CMA - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -34.93%. Currently paying a dividend of $0.68 per share, the company has a dividend yield of 6.53%. In comparison, the Banks - Major Regional industry's yield is 3.95%, while the S&P 500's yield is 1.77%.
Looking at dividend growth, the company's current annualized dividend of $2.84 is up 4.4% from last year. Comerica Incorporated has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.87%. 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. Comerica Incorporated's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
CMA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $9.57 per share, with earnings expected to increase 12.99% from the year ago period.
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. 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. 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, CMA 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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Comerica Incorporated (CMA) 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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Comerica Incorporated in Focus
Based in Dallas, Comerica Incorporated (CMA - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -34.93%. Currently paying a dividend of $0.68 per share, the company has a dividend yield of 6.53%. In comparison, the Banks - Major Regional industry's yield is 3.95%, while the S&P 500's yield is 1.77%.
Looking at dividend growth, the company's current annualized dividend of $2.84 is up 4.4% from last year. Comerica Incorporated has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.87%. 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. Comerica Incorporated's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
CMA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $9.57 per share, with earnings expected to increase 12.99% from the year ago period.
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. 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. 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, CMA 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).