All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BB&T in Focus
Headquartered in Winston-Salem, BB&T is a Finance stock that has seen a price change of 10.85% so far this year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 3.37%. In comparison, the Banks - Major Regional industry's yield is 3.08%, while the S&P 500's yield is 1.92%.
Looking at dividend growth, the company's current annualized dividend of $1.62 is up 3.8% from last year. Over the last 5 years, BB&T has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.32%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. BB&T's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BBT expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $4.29 per share, which represents a year-over-year growth rate of 9.72%.
Bottom Line
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, BBT 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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BB&T (BBT) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BB&T in Focus
Headquartered in Winston-Salem, BB&T is a Finance stock that has seen a price change of 10.85% so far this year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 3.37%. In comparison, the Banks - Major Regional industry's yield is 3.08%, while the S&P 500's yield is 1.92%.
Looking at dividend growth, the company's current annualized dividend of $1.62 is up 3.8% from last year. Over the last 5 years, BB&T has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.32%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. BB&T's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BBT expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $4.29 per share, which represents a year-over-year growth rate of 9.72%.
Bottom Line
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, BBT 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).