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Why The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock for Your Portfolio
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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
The Bank of New York Mellon Corporation in Focus
The Bank of New York Mellon Corporation (BK - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 5.96% since the start of the year. The company is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 3.05% compared to the Banks - Major Regional industry's yield of 3.93% and the S&P 500's yield of 1.62%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 6.3% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.67%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. The Bank of New York Mellon Corporation's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BK expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.23 per share, which represents a year-over-year growth rate of 3.56%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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, BK presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Why The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock for Your Portfolio
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
The Bank of New York Mellon Corporation in Focus
The Bank of New York Mellon Corporation (BK - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 5.96% since the start of the year. The company is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 3.05% compared to the Banks - Major Regional industry's yield of 3.93% and the S&P 500's yield of 1.62%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 6.3% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.67%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. The Bank of New York Mellon Corporation's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BK expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.23 per share, which represents a year-over-year growth rate of 3.56%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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, BK presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).