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The Bank of New York Mellon Corporation (BK) Could Be a Great Choice
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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. 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 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.
The Bank of New York Mellon Corporation in Focus
The Bank of New York Mellon Corporation (BK - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of -0.31% since the start of the year. The company is currently shelling out a dividend of $0.42 per share, with a dividend yield of 3.7%. This compares to the Banks - Major Regional industry's yield of 4.36% and the S&P 500's yield of 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 18.3% from last year. The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.45%. 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. The Bank of New York Mellon Corporation's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $4.85 per share, representing a year-over-year earnings growth rate of 5.66%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BK 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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The Bank of New York Mellon Corporation (BK) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
The Bank of New York Mellon Corporation in Focus
The Bank of New York Mellon Corporation (BK - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of -0.31% since the start of the year. The company is currently shelling out a dividend of $0.42 per share, with a dividend yield of 3.7%. This compares to the Banks - Major Regional industry's yield of 4.36% and the S&P 500's yield of 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 18.3% from last year. The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.45%. 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. The Bank of New York Mellon Corporation's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $4.85 per share, representing a year-over-year earnings growth rate of 5.66%.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BK 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).