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Kimco Realty (KIM) Could Be a Great Choice

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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Kimco Realty (KIM - Free Report) is headquartered in Jericho, and is in the Finance sector. The stock has seen a price change of -4.14% since the start of the year. The real estate investment trust is currently shelling out a dividend of $0.25 per share, with a dividend yield of 4.45%. This compares to the REIT and Equity Trust - Retail industry's yield of 4.03% and the S&P 500's yield of 1.49%.

Looking at dividend growth, the company's current annualized dividend of $1.00 is up 3.1% from last year. Over the last 5 years, Kimco Realty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.37%. 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. Kimco Realty's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, KIM expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.74 per share, representing a year-over-year earnings growth rate of 5.45%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KIM 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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