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Why Morgan Stanley (MS) is a Great Dividend Stock Right Now
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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Morgan Stanley in Focus
Headquartered in New York, Morgan Stanley (MS - Free Report) is a Finance stock that has seen a price change of 12.21% so far this year. The investment bank is paying out a dividend of $0.93 per share at the moment, with a dividend yield of 2.62% compared to the Financial - Investment Bank industry's yield of 1.09% and the S&P 500's yield of 1.54%.
In terms of dividend growth, the company's current annualized dividend of $3.70 is up 4.2% from last year. Morgan Stanley has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 25.22%. 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. Morgan Stanley'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, MS expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $8.54 per share, representing a year-over-year earnings growth rate of 7.42%.
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. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MS 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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Why Morgan Stanley (MS) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Morgan Stanley in Focus
Headquartered in New York, Morgan Stanley (MS - Free Report) is a Finance stock that has seen a price change of 12.21% so far this year. The investment bank is paying out a dividend of $0.93 per share at the moment, with a dividend yield of 2.62% compared to the Financial - Investment Bank industry's yield of 1.09% and the S&P 500's yield of 1.54%.
In terms of dividend growth, the company's current annualized dividend of $3.70 is up 4.2% from last year. Morgan Stanley has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 25.22%. 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. Morgan Stanley'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, MS expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $8.54 per share, representing a year-over-year earnings growth rate of 7.42%.
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. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MS 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).