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Why TIM S.A. Sponsored ADR (TIMB) is a Top Dividend Stock for Your Portfolio

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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.

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

Based in Rio De Janeiro, TIM S.A. Sponsored ADR (TIMB - Free Report) is in the Computer and Technology sector, and so far this year, shares have seen a price change of 86.48%. The company is paying out a dividend of $0.09 per share at the moment, with a dividend yield of 3.56% compared to the Wireless Non-US industry's yield of 2.6% and the S&P 500's yield of 1.52%.

Looking at dividend growth, the company's current annualized dividend of $0.78 is up 40.3% from last year. Over the last 5 years, TIM S.A. Sponsored ADR has increased its dividend 3 times on a year-over-year basis for an average annual increase of 9.26%. 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. TIM's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, TIMB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.38 per share, which represents a year-over-year growth rate of 14.05%.

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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, TIMB 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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