Back to top

Image: Bigstock

Are You Looking for a High-Growth Dividend Stock?

Read MoreHide Full Article

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.

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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Jericho, Kimco Realty (KIM - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 11.3%. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 4.61%. In comparison, the REIT and Equity Trust - Retail industry's yield is 4.13%, while the S&P 500's yield is 1.46%.

Looking at dividend growth, the company's current annualized dividend of $1.04 is up 3% 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 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.

KIM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $1.82 per share, with earnings expected to increase 3.41% from the year ago period.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KIM presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in