We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why JPMorgan Chase (JPM) is a Great Dividend Stock Right Now
Read MoreHide Full Article
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
JPMorgan Chase in Focus
JPMorgan Chase (JPM - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 15.68% since the start of the year. The biggest U.S. bank by assets is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.83%. This compares to the Banks - Major Regional industry's yield of 2.88% and the S&P 500's yield of 1.92%.
Looking at dividend growth, the company's current annualized dividend of $3.20 is up 29% from last year. In the past five-year period, JPMorgan Chase has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.18%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, JP Morgan's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
JPM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $9.94 per share, with earnings expected to increase 10.44% from the year ago period.
Bottom Line
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, JPM 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).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why JPMorgan Chase (JPM) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
JPMorgan Chase in Focus
JPMorgan Chase (JPM - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 15.68% since the start of the year. The biggest U.S. bank by assets is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.83%. This compares to the Banks - Major Regional industry's yield of 2.88% and the S&P 500's yield of 1.92%.
Looking at dividend growth, the company's current annualized dividend of $3.20 is up 29% from last year. In the past five-year period, JPMorgan Chase has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.18%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, JP Morgan's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
JPM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $9.94 per share, with earnings expected to increase 10.44% from the year ago period.
Bottom Line
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, JPM 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).