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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
The Bank of New York Mellon Corporation in Focus
Headquartered in New York, The Bank of New York Mellon Corporation (BK - Free Report) is a Finance stock that has seen a price change of 14.94% so far this year. Currently paying a dividend of $0.47 per share, the company has a dividend yield of 2.13%. In comparison, the Banks - Major Regional industry's yield is 3.21%, while the S&P 500's yield is 1.52%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.88 is up 5.6% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.74%. 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. The Bank of New York Mellon's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $6.93 per share, with earnings expected to increase 14.93% 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BK is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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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 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.
The Bank of New York Mellon Corporation in Focus
Headquartered in New York, The Bank of New York Mellon Corporation (BK - Free Report) is a Finance stock that has seen a price change of 14.94% so far this year. Currently paying a dividend of $0.47 per share, the company has a dividend yield of 2.13%. In comparison, the Banks - Major Regional industry's yield is 3.21%, while the S&P 500's yield is 1.52%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.88 is up 5.6% from last year. In the past five-year period, The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.74%. 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. The Bank of New York Mellon's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $6.93 per share, with earnings expected to increase 14.93% 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BK is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).