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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Citizens Financial Group in Focus
Based in Providence, Citizens Financial Group (CFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -24.08%. The bank is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 5.62% compared to the Financial - Savings and Loan industry's yield of 3.14% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 3.7% from last year. Over the last 5 years, Citizens Financial Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.27%. 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. Citizens Financial Group's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFG for this fiscal year. The Zacks Consensus Estimate for 2023 is $5.03 per share, with earnings expected to increase 22.68% 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. But, not every company offers 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, CFG 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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Are You Looking for a High-Growth Dividend Stock?
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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Citizens Financial Group in Focus
Based in Providence, Citizens Financial Group (CFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -24.08%. The bank is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 5.62% compared to the Financial - Savings and Loan industry's yield of 3.14% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 3.7% from last year. Over the last 5 years, Citizens Financial Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.27%. 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. Citizens Financial Group's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFG for this fiscal year. The Zacks Consensus Estimate for 2023 is $5.03 per share, with earnings expected to increase 22.68% 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. But, not every company offers 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, CFG 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).