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Why Intesa Sanpaolo SpA (ISNPY) is a Top Dividend Stock for Your Portfolio

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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Intesa Sanpaolo SpA in Focus

Based in Turin, Intesa Sanpaolo SpA (ISNPY - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 38.97%. The company is paying out a dividend of $0.84 per share at the moment, with a dividend yield of 5% compared to the Banks - Foreign industry's yield of 3.39% and the S&P 500's yield of 1.53%.

Looking at dividend growth, the company's current annualized dividend of $1.68 is up 13.6% from last year. Intesa Sanpaolo SpA has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 40.86%. 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. Right now, Intesa Sanpaolo's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, ISNPY expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.49 per share, with earnings expected to increase 11.86% from the year ago period.

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. However, not all companies offer 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. That said, they can take comfort from the fact that ISNPY 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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