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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Reinsurance Group in Focus
Headquartered in Chesterfield, Reinsurance Group (RGA - Free Report) is a Finance stock that has seen a price change of 0.87% so far this year. The reinsurance company is currently shelling out a dividend of $0.85 per share, with a dividend yield of 2.37%. This compares to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.73%.
In terms of dividend growth, the company's current annualized dividend of $3.40 is up 11.1% from last year. Over the last 5 years, Reinsurance Group has increased its dividend 3 times on a year-over-year basis for an average annual increase of 6.21%. 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. Reinsurance Group's current payout ratio is 18%. This means it paid out 18% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, RGA expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $18.13 per share, representing a year-over-year earnings growth rate of 25.64%.
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.
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. 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, RGA 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).
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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Reinsurance Group in Focus
Headquartered in Chesterfield, Reinsurance Group (RGA - Free Report) is a Finance stock that has seen a price change of 0.87% so far this year. The reinsurance company is currently shelling out a dividend of $0.85 per share, with a dividend yield of 2.37%. This compares to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.73%.
In terms of dividend growth, the company's current annualized dividend of $3.40 is up 11.1% from last year. Over the last 5 years, Reinsurance Group has increased its dividend 3 times on a year-over-year basis for an average annual increase of 6.21%. 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. Reinsurance Group's current payout ratio is 18%. This means it paid out 18% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, RGA expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $18.13 per share, representing a year-over-year earnings growth rate of 25.64%.
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.
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. 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, RGA 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).