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Why Washington Federal (WAFD) 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Washington Federal in Focus
Based in Seattle, Washington Federal (WAFD - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.47%. 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 2.92% compared to the Banks - West industry's yield of 2.43% and the S&P 500's yield of 1.42%.
Taking a look at the company's dividend growth, its 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 10.71%. 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. Washington Federal's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
WAFD is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.06 per share, representing a year-over-year earnings growth rate of 28.03%.
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. But, not every company offers 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. 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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Why Washington Federal (WAFD) 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Washington Federal in Focus
Based in Seattle, Washington Federal (WAFD - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -1.47%. 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 2.92% compared to the Banks - West industry's yield of 2.43% and the S&P 500's yield of 1.42%.
Taking a look at the company's dividend growth, its 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 10.71%. 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. Washington Federal's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
WAFD is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.06 per share, representing a year-over-year earnings growth rate of 28.03%.
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. But, not every company offers 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. 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).