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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 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BankUnited, Inc. In Focus
Based in Miami Lakes, BankUnited, Inc. (BKU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.5%. The company is paying out a dividend of $0.29 per share at the moment, with a dividend yield of 3.02% compared to the Banks - Major Regional industry's yield of 3.32% and the S&P 500's yield of 1.54%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.16 is up 9.4% from last year. BankUnited, Inc. has increased its dividend 4 times on a year-over-year basis over the last 5 years 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. BankUnited's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BKU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.88 per share, with earnings expected to increase 1.77% 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. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BKU is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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BankUnited, Inc. (BKU) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BankUnited, Inc. In Focus
Based in Miami Lakes, BankUnited, Inc. (BKU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.5%. The company is paying out a dividend of $0.29 per share at the moment, with a dividend yield of 3.02% compared to the Banks - Major Regional industry's yield of 3.32% and the S&P 500's yield of 1.54%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.16 is up 9.4% from last year. BankUnited, Inc. has increased its dividend 4 times on a year-over-year basis over the last 5 years 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. BankUnited's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BKU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.88 per share, with earnings expected to increase 1.77% 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. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BKU is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).