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Why JPMorgan Chase & Co. (JPM) 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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
JPMorgan Chase & Co. In Focus
JPMorgan Chase & Co. (JPM - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 24.9% since the start of the year. Currently paying a dividend of $1.15 per share, the company has a dividend yield of 2.17%. In comparison, the Banks - Major Regional industry's yield is 3.28%, while the S&P 500's yield is 1.59%.
In terms of dividend growth, the company's current annualized dividend of $4.60 is up 13.6% from last year. Over the last 5 years, JPMorgan Chase & Co. has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.21%. 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. JPMorgan Chase & Co.'s current payout ratio is 27%. This means it paid out 27% of its trailing 12-month EPS as dividend.
JPM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $16.78 per share, with earnings expected to increase 3.39% 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. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that JPM is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why JPMorgan Chase & Co. (JPM) 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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
JPMorgan Chase & Co. In Focus
JPMorgan Chase & Co. (JPM - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 24.9% since the start of the year. Currently paying a dividend of $1.15 per share, the company has a dividend yield of 2.17%. In comparison, the Banks - Major Regional industry's yield is 3.28%, while the S&P 500's yield is 1.59%.
In terms of dividend growth, the company's current annualized dividend of $4.60 is up 13.6% from last year. Over the last 5 years, JPMorgan Chase & Co. has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.21%. 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. JPMorgan Chase & Co.'s current payout ratio is 27%. This means it paid out 27% of its trailing 12-month EPS as dividend.
JPM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $16.78 per share, with earnings expected to increase 3.39% 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. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that JPM is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).