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Why Pitney Bowes (PBI) 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Pitney Bowes (PBI - Free Report) is headquartered in Stamford, and is in the Computer and Technology sector. The stock has seen a price change of 55.8% since the start of the year. The mailing equipment and software company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.84% compared to the Office Automation and Equipment industry's yield of 2.5% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.32 is up 60% from last year. Over the last 5 years, Pitney Bowes has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.90%. 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. Pitney Bowes's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
PBI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $1.30 per share, with earnings expected to increase 58.54% from the year ago period.
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.
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 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 PBI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Pitney Bowes (PBI) 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Pitney Bowes (PBI - Free Report) is headquartered in Stamford, and is in the Computer and Technology sector. The stock has seen a price change of 55.8% since the start of the year. The mailing equipment and software company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.84% compared to the Office Automation and Equipment industry's yield of 2.5% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $0.32 is up 60% from last year. Over the last 5 years, Pitney Bowes has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.90%. 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. Pitney Bowes's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
PBI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $1.30 per share, with earnings expected to increase 58.54% from the year ago period.
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.
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 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 PBI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).