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Seeking More Than 6% Dividend Yield? Watch for Zions (ZION)
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In this current backdrop, when the financial sector is facing turmoil due to the regional banking crisis and expectations of economic slowdown/recession in the near term, solid dividend-yielding stocks should be on investors’ radar. Today, we are discussing one such stock – Zions Bancorporation (ZION - Free Report) .
Headquartered in Salt Lake City, UT, Zions is a diversified financial service provider operating a widespread network of more than 400 branches. The bank has been increasing its quarterly dividend on a regular basis, with the last hike of 8% to 41 cents per share in July 2022.
Over the past five years, Zions increased the dividend four times, with an annualized dividend growth rate of 8.7%. Considering last day’s closing price of $27.24, the company’s dividend yield currently stands at 6.02%. This is impressive compared with the industry average of 3.45% and attractive for income investors as it represents a steady income stream.
Is the Zions stock worth considering to earn a robust dividend yield? Let’s check out the company fundamentals to understand risk and rewards. This will help us make a proper investment decision.
ZION has been witnessing consistent organic growth. The company’s total revenues witnessed a CAGR of 3.4% over the last three years (2019-2022) despite recording a fall in 2020. The upward trend continued in the first quarter of 2023. Yet, the deteriorating operating backdrop, given the rising recession fears, is a major near-term headwind. Though we expect total revenues to decline in 2023 and 2024, the same will grow 1.4% in 2025.
Net loans and leases (net of unearned income and fees) witnessed a CAGR of 4.5% over the last three years (ended 2022). Though loan balance decreased in the first quarter on gradually declining demand, our estimates for total loans suggest a CAGR of 5.2% over the next three years.
Additionally, ZION is expected to keep benefiting from higher rates. With the Federal Reserve expected to keep the rates higher in the near term to combat inflation, the company’s net interest margin (NIM) is likely to witness a decent expansion despite a rise in deposit costs. We project NIM to be 3.04% for 2023.
Hence, despite near-term headwinds like rising expenses and worsening asset quality, ZION stock is fundamentally solid. So far this year, shares of Zions have plunged 44.6% compared with the industry’s fall of 38.1%.
A couple of bank stocks, like Associated Banc-Corp (ASB - Free Report) and Huntington Bancshares (HBAN - Free Report) , are worth a look as these have robust dividend yields.
Considering the last day’s closing price, Associated Banc-Corp’s dividend yield currently stands at 5.41%. Over the past six months, the shares of ASB have lost 35.9%.
Based on the last day’s closing price, Huntington Bancshares’ dividend yield currently stands at 6.18%. Over the past six months, the shares of HBAN have lost 31.5%.
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Seeking More Than 6% Dividend Yield? Watch for Zions (ZION)
In this current backdrop, when the financial sector is facing turmoil due to the regional banking crisis and expectations of economic slowdown/recession in the near term, solid dividend-yielding stocks should be on investors’ radar. Today, we are discussing one such stock – Zions Bancorporation (ZION - Free Report) .
Headquartered in Salt Lake City, UT, Zions is a diversified financial service provider operating a widespread network of more than 400 branches. The bank has been increasing its quarterly dividend on a regular basis, with the last hike of 8% to 41 cents per share in July 2022.
Over the past five years, Zions increased the dividend four times, with an annualized dividend growth rate of 8.7%. Considering last day’s closing price of $27.24, the company’s dividend yield currently stands at 6.02%. This is impressive compared with the industry average of 3.45% and attractive for income investors as it represents a steady income stream.
Zions Bancorporation, N.A. Dividend Yield (TTM)
Zions Bancorporation, N.A. dividend-yield-ttm | Zions Bancorporation, N.A. Quote
Is the Zions stock worth considering to earn a robust dividend yield? Let’s check out the company fundamentals to understand risk and rewards. This will help us make a proper investment decision.
ZION has been witnessing consistent organic growth. The company’s total revenues witnessed a CAGR of 3.4% over the last three years (2019-2022) despite recording a fall in 2020. The upward trend continued in the first quarter of 2023. Yet, the deteriorating operating backdrop, given the rising recession fears, is a major near-term headwind. Though we expect total revenues to decline in 2023 and 2024, the same will grow 1.4% in 2025.
Net loans and leases (net of unearned income and fees) witnessed a CAGR of 4.5% over the last three years (ended 2022). Though loan balance decreased in the first quarter on gradually declining demand, our estimates for total loans suggest a CAGR of 5.2% over the next three years.
Additionally, ZION is expected to keep benefiting from higher rates. With the Federal Reserve expected to keep the rates higher in the near term to combat inflation, the company’s net interest margin (NIM) is likely to witness a decent expansion despite a rise in deposit costs. We project NIM to be 3.04% for 2023.
Hence, despite near-term headwinds like rising expenses and worsening asset quality, ZION stock is fundamentally solid. So far this year, shares of Zions have plunged 44.6% compared with the industry’s fall of 38.1%.
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Therefore, income investors must watch this Zacks Rank #3 (Hold) stock as it will help generate robust returns over time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bank Stocks Worth a Look
A couple of bank stocks, like Associated Banc-Corp (ASB - Free Report) and Huntington Bancshares (HBAN - Free Report) , are worth a look as these have robust dividend yields.
Considering the last day’s closing price, Associated Banc-Corp’s dividend yield currently stands at 5.41%. Over the past six months, the shares of ASB have lost 35.9%.
Based on the last day’s closing price, Huntington Bancshares’ dividend yield currently stands at 6.18%. Over the past six months, the shares of HBAN have lost 31.5%.