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Are You Looking for a High-Growth Dividend Stock? Citigroup (C) Could Be a Great Choice
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Citigroup in Focus
Citigroup (C - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 34.65% since the start of the year. The U.S. bank is paying out a dividend of $0.51 per share at the moment, with a dividend yield of 2.91% compared to the Banks - Major Regional industry's yield of 3.21% and the S&P 500's yield of 1.91%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.04 is up 32.5% from last year. In the past five-year period, Citigroup has increased its dividend 5 times on a year-over-year basis for an average annual increase of 118.81%. 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. Right now, Citigroup's payout ratio is 26%, which means it paid out 26% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for C for this fiscal year. The Zacks Consensus Estimate for 2019 is $7.62 per share, representing a year-over-year earnings growth rate of 14.59%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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, C 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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Are You Looking for a High-Growth Dividend Stock? Citigroup (C) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Citigroup in Focus
Citigroup (C - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 34.65% since the start of the year. The U.S. bank is paying out a dividend of $0.51 per share at the moment, with a dividend yield of 2.91% compared to the Banks - Major Regional industry's yield of 3.21% and the S&P 500's yield of 1.91%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.04 is up 32.5% from last year. In the past five-year period, Citigroup has increased its dividend 5 times on a year-over-year basis for an average annual increase of 118.81%. 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. Right now, Citigroup's payout ratio is 26%, which means it paid out 26% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for C for this fiscal year. The Zacks Consensus Estimate for 2019 is $7.62 per share, representing a year-over-year earnings growth rate of 14.59%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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, C 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).