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Why Popular (BPOP) 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. 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 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.
Popular in Focus
Based in Hato Rey, Popular (BPOP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.53%. The company that runs Banco Popular and other banks in Puerto Rico and the U.S. Is paying out a dividend of $0.62 per share at the moment, with a dividend yield of 2.95% compared to the Banks - Southeast industry's yield of 2.86% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $2.48 is up 9.3% from last year. Popular has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 16.28%. 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. Popular's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BPOP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $8.52 per share, which represents a year-over-year growth rate of 4.28%.
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. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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, BPOP 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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Why Popular (BPOP) 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. 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 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.
Popular in Focus
Based in Hato Rey, Popular (BPOP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.53%. The company that runs Banco Popular and other banks in Puerto Rico and the U.S. Is paying out a dividend of $0.62 per share at the moment, with a dividend yield of 2.95% compared to the Banks - Southeast industry's yield of 2.86% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $2.48 is up 9.3% from last year. Popular has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 16.28%. 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. Popular's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BPOP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $8.52 per share, which represents a year-over-year growth rate of 4.28%.
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. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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, BPOP 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).