Yahoo Finance Are You Looking for a High-Growth Dividend Stock?
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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 -28.41% so far this year. The insurer is paying out a dividend of $0.52 per share at the moment, with a dividend yield of 4.01% compared to the Insurance - Multi line industry's yield of 2.32% and the S&P 500's yield of 1.79%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.08 is up 5.1% 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 4.28%. 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, MetLife's payout ratio is 32%, which means it paid out 32% of its trailing 12-month EPS as dividend.
MET is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $7.83 per share, with earnings expected to increase 14.31% from the year ago period.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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).
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MetLife, Inc. (MET) : Free Stock Analysis Report
