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This is Why Manulife Financial (MFC) is a Great Dividend Stock
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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 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.
Manulife Financial in Focus
Based in Toronto, Manulife Financial (MFC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 27.84%. The financial services company is currently shelling out a dividend of $0.19 per share, with a dividend yield of 4.12%. This compares to the Insurance - Life Insurance industry's yield of 0.5% and the S&P 500's yield of 1.92%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.75 is up 6.2% from last year. Manulife Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 9.08%. 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. Manulife's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
MFC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $2.19 per share, which represents a year-over-year growth rate of 3.79%.
Bottom Line
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.
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, MFC 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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This is Why Manulife Financial (MFC) is a Great Dividend Stock
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 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.
Manulife Financial in Focus
Based in Toronto, Manulife Financial (MFC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 27.84%. The financial services company is currently shelling out a dividend of $0.19 per share, with a dividend yield of 4.12%. This compares to the Insurance - Life Insurance industry's yield of 0.5% and the S&P 500's yield of 1.92%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.75 is up 6.2% from last year. Manulife Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 9.08%. 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. Manulife's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
MFC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $2.19 per share, which represents a year-over-year growth rate of 3.79%.
Bottom Line
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.
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, MFC 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).