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Prudential (PRU) is a Top Dividend Stock Right Now: Should You Buy?
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
Prudential in Focus
Based in Newark, Prudential (PRU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 11.55%. Currently paying a dividend of $1.3 per share, the company has a dividend yield of 4.49%. In comparison, the Insurance - Multi line industry's yield is 1.89%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $5.20 is up 4% from last year. Over the last 5 years, Prudential has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.27%. 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. Right now, Prudential Financial's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PRU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $13.40 per share, which represents a year-over-year growth rate of 15.32%.
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. It's important to keep in mind that not all companies provide 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PRU 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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Prudential (PRU) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
Prudential in Focus
Based in Newark, Prudential (PRU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 11.55%. Currently paying a dividend of $1.3 per share, the company has a dividend yield of 4.49%. In comparison, the Insurance - Multi line industry's yield is 1.89%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $5.20 is up 4% from last year. Over the last 5 years, Prudential has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.27%. 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. Right now, Prudential Financial's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PRU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $13.40 per share, which represents a year-over-year growth rate of 15.32%.
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. It's important to keep in mind that not all companies provide 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PRU 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).