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This is Why Cullen/Frost Bankers (CFR) 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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cullen/Frost Bankers in Focus
Headquartered in San Antonio, Cullen/Frost Bankers (CFR - Free Report) is a Finance stock that has seen a price change of 9.38% so far this year. The financial holding company is paying out a dividend of $0.75 per share at the moment, with a dividend yield of 2.18% compared to the Banks - Southwest industry's yield of 1.24% and the S&P 500's yield of 1.46%.
In terms of dividend growth, the company's current annualized dividend of $3 is up 2% from last year. Cullen/Frost Bankers has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.93%. 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, Cullen/Frost's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFR for this fiscal year. The Zacks Consensus Estimate for 2022 is $6.79 per share, with earnings expected to increase 0.44% from the year ago period.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CFR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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This is Why Cullen/Frost Bankers (CFR) 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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cullen/Frost Bankers in Focus
Headquartered in San Antonio, Cullen/Frost Bankers (CFR - Free Report) is a Finance stock that has seen a price change of 9.38% so far this year. The financial holding company is paying out a dividend of $0.75 per share at the moment, with a dividend yield of 2.18% compared to the Banks - Southwest industry's yield of 1.24% and the S&P 500's yield of 1.46%.
In terms of dividend growth, the company's current annualized dividend of $3 is up 2% from last year. Cullen/Frost Bankers has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.93%. 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, Cullen/Frost's payout ratio is 44%, which means it paid out 44% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CFR for this fiscal year. The Zacks Consensus Estimate for 2022 is $6.79 per share, with earnings expected to increase 0.44% from the year ago period.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CFR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).