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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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Manulife Financial in Focus
Based in Toronto, Manulife Financial (MFC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 5.72%. The financial services company is paying out a dividend of $0.27 per share at the moment, with a dividend yield of 5.71% compared to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.66%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.08 is up 6.3% from last year. Over the last 5 years, Manulife Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.49%. 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. Manulife's current payout ratio is 47%. This means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MFC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.44 per share, representing a year-over-year earnings growth rate of 2.52%.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MFC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Manulife Financial (MFC) Could Be a Great Choice
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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Manulife Financial in Focus
Based in Toronto, Manulife Financial (MFC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 5.72%. The financial services company is paying out a dividend of $0.27 per share at the moment, with a dividend yield of 5.71% compared to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.66%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.08 is up 6.3% from last year. Over the last 5 years, Manulife Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.49%. 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. Manulife's current payout ratio is 47%. This means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MFC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.44 per share, representing a year-over-year earnings growth rate of 2.52%.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MFC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).