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This is Why Washington Federal (WAFD) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Washington Federal in Focus
Headquartered in Seattle, Washington Federal (WAFD - Free Report) is a Finance stock that has seen a price change of 2.49% so far this year. The holding company for Washington Federal Savings Bank is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.81% compared to the Banks - West industry's yield of 2.14% and the S&P 500's yield of 1.47%.
Looking at dividend growth, the company's current annualized dividend of $0.96 is up 5.5% from last year. In the past five-year period, Washington Federal has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.14%. 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, Washington Federal's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WAFD expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.92 per share, representing a year-over-year earnings growth rate of 22.18%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful 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 WAFD 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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This is Why Washington Federal (WAFD) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Washington Federal in Focus
Headquartered in Seattle, Washington Federal (WAFD - Free Report) is a Finance stock that has seen a price change of 2.49% so far this year. The holding company for Washington Federal Savings Bank is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.81% compared to the Banks - West industry's yield of 2.14% and the S&P 500's yield of 1.47%.
Looking at dividend growth, the company's current annualized dividend of $0.96 is up 5.5% from last year. In the past five-year period, Washington Federal has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.14%. 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, Washington Federal's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WAFD expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.92 per share, representing a year-over-year earnings growth rate of 22.18%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful 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 WAFD is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).