Are You Looking for a High-Growth 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
MetLife in Focus
Headquartered in New York, MetLife (MET) is a Finance stock that has seen a price change of -24.97% so far this year. The insurer is currently shelling out a dividend of $0.5 per share, with a dividend yield of 3.68%. This compares to the Insurance - Multi line industry's yield of 2.36% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $2 is up 1% from last year. In the past five-year period, MetLife has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.54%. 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. MetLife's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MET for this fiscal year. The Zacks Consensus Estimate for 2023 is $8.29 per share, which represents a year-over-year growth rate of 21.02%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MET 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).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MetLife, Inc. (MET) : Free Stock Analysis Report
To read this article on Zacks.com click here.