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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Headquartered in Chicago, Northern Trust Corporation (NTRS - Free Report) is a Finance stock that has seen a price change of 24.32% so far this year. The company is paying out a dividend of $0.80 per share at the moment, with a dividend yield of 2.51% compared to the Banks - Major Regional industry's yield of 3.21% and the S&P 500's yield of 1.5%.
Looking at dividend growth, the company's current annualized dividend of $3.20 is up 6.7% from last year. Over the last 5 years, Northern Trust Corporation has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.01%. 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. Northern Trust's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
NTRS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $8.54 per share, representing a year-over-year earnings growth rate of 10.91%.
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.
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 have to be mindful 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 NTRS 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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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Headquartered in Chicago, Northern Trust Corporation (NTRS - Free Report) is a Finance stock that has seen a price change of 24.32% so far this year. The company is paying out a dividend of $0.80 per share at the moment, with a dividend yield of 2.51% compared to the Banks - Major Regional industry's yield of 3.21% and the S&P 500's yield of 1.5%.
Looking at dividend growth, the company's current annualized dividend of $3.20 is up 6.7% from last year. Over the last 5 years, Northern Trust Corporation has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.01%. 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. Northern Trust's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
NTRS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $8.54 per share, representing a year-over-year earnings growth rate of 10.91%.
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.
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 have to be mindful 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 NTRS is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).