This is Why Popular (BPOP) is a Great 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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Popular in Focus
Headquartered in Hato Rey, Popular (BPOP) is a Finance stock that has seen a price change of 20.57% so far this year. The company that runs Banco Popular and other banks in Puerto Rico and the U.S. Is paying out a dividend of $0.62 per share at the moment, with a dividend yield of 2.51% compared to the Banks - Southeast industry's yield of 2.52% and the S&P 500's yield of 1.57%.
In terms of dividend growth, the company's current annualized dividend of $2.48 is up 9.3% from last year. Over the last 5 years, Popular has increased its dividend 4 times on a year-over-year basis for an average annual increase of 15.27%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Popular's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BPOP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $8.86 per share, representing a year-over-year earnings growth rate of 8.45%.
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. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that BPOP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Popular, Inc. (BPOP) : Free Stock Analysis Report