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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Voya Financial in Focus
Based in New York, Voya Financial (VOYA - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.78%. The retirement, investment and insurance company is paying out a dividend of $0.4 per share at the moment, with a dividend yield of 2.48% compared to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.75%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.60 is up 100% from last year. Voya Financial has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 71.41%. 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, Voya's payout ratio is 9%, which means it paid out 9% of its trailing 12-month EPS as dividend.
VOYA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $8.07 per share, which represents a year-over-year growth rate of 6.46%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VOYA 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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Voya Financial (VOYA) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Voya Financial in Focus
Based in New York, Voya Financial (VOYA - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.78%. The retirement, investment and insurance company is paying out a dividend of $0.4 per share at the moment, with a dividend yield of 2.48% compared to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.75%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.60 is up 100% from last year. Voya Financial has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 71.41%. 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, Voya's payout ratio is 9%, which means it paid out 9% of its trailing 12-month EPS as dividend.
VOYA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $8.07 per share, which represents a year-over-year growth rate of 6.46%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VOYA 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).