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Why FNF Group (FNF) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
FNF Group in Focus
Headquartered in Jacksonville, FNF Group (FNF - Free Report) is a Finance stock that has seen a price change of -31.47% so far this year. The provider of title insurance and mortgage services is paying out a dividend of $0.33 per share at the moment, with a dividend yield of 4.25% compared to the Insurance - Property and Casualty industry's yield of 1.32% and the S&P 500's yield of 1.69%.
Looking at dividend growth, the company's current annualized dividend of $1.32 is up 4.8% from last year. Over the last 5 years, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.76%. 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. FNF Group's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
FNF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $3.92 per share, representing a year-over-year earnings growth rate of 15.63%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. That said, they can take comfort from the fact that FNF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why FNF Group (FNF) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
FNF Group in Focus
Headquartered in Jacksonville, FNF Group (FNF - Free Report) is a Finance stock that has seen a price change of -31.47% so far this year. The provider of title insurance and mortgage services is paying out a dividend of $0.33 per share at the moment, with a dividend yield of 4.25% compared to the Insurance - Property and Casualty industry's yield of 1.32% and the S&P 500's yield of 1.69%.
Looking at dividend growth, the company's current annualized dividend of $1.32 is up 4.8% from last year. Over the last 5 years, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.76%. 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. FNF Group's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
FNF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $3.92 per share, representing a year-over-year earnings growth rate of 15.63%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. That said, they can take comfort from the fact that FNF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).