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Why Chubb (CB) is a Top Dividend Stock for Your Portfolio
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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 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 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.
Chubb in Focus
Chubb (CB - Free Report) is headquartered in Zurich, and is in the Finance sector. The stock has seen a price change of -3.82% since the start of the year. Currently paying a dividend of $0.78 per share, the company has a dividend yield of 2.11%. In comparison, the Insurance - Property and Casualty industry's yield is 1.38%, while the S&P 500's yield is 1.47%.
Looking at dividend growth, the company's current annualized dividend of $3.12 is up 1% from last year. Chubb has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 3.03%. 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. Right now, Chubb's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CB for this fiscal year. The Zacks Consensus Estimate for 2021 is $11.41 per share, which represents a year-over-year growth rate of 56.09%.
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. It's important to keep in mind that not all companies provide 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. With that in mind, CB 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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Why Chubb (CB) is a Top Dividend Stock for Your Portfolio
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 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.
Chubb in Focus
Chubb (CB - Free Report) is headquartered in Zurich, and is in the Finance sector. The stock has seen a price change of -3.82% since the start of the year. Currently paying a dividend of $0.78 per share, the company has a dividend yield of 2.11%. In comparison, the Insurance - Property and Casualty industry's yield is 1.38%, while the S&P 500's yield is 1.47%.
Looking at dividend growth, the company's current annualized dividend of $3.12 is up 1% from last year. Chubb has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 3.03%. 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. Right now, Chubb's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CB for this fiscal year. The Zacks Consensus Estimate for 2021 is $11.41 per share, which represents a year-over-year growth rate of 56.09%.
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. It's important to keep in mind that not all companies provide 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. With that in mind, CB 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).