Back to top

Image: Bigstock

Are You Looking for a High-Growth Dividend Stock?

Read MoreHide Full Article

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.

FNF Group in Focus

FNF Group (FNF - Free Report) is headquartered in Jacksonville, and is in the Finance sector. The stock has seen a price change of 15.8% since the start of the year. Currently paying a dividend of $0.5 per share, the company has a dividend yield of 3.08%. In comparison, the Insurance - Property and Casualty industry's yield is 0.68%, while the S&P 500's yield is 1.6%.

Looking at dividend growth, the company's current annualized dividend of $2 is up 3.1% from last year. In the past five-year period, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.84%. 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. FNF Group's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.

FNF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $5.90 per share, representing a year-over-year earnings growth rate of 27.43%.

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.

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. 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 FNF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Fidelity National Financial, Inc. (FNF) - free report >>

Published in