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Kimco Realty (KIM) Could Be a Great Choice

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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 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.

Kimco Realty (KIM - Free Report) is headquartered in Jericho, and is in the Finance sector. The stock has seen a price change of 13.81% since the start of the year. The real estate investment trust is currently shelling out a dividend of $0.26 per share, with a dividend yield of 4.51%. This compares to the REIT and Equity Trust - Retail industry's yield of 4.12% and the S&P 500's yield of 1.4%.

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 $1.81 per share, with earnings expected to increase 2.84% 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. But, not every company offers a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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).

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