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This is Why Stifel Financial (SF) is a Great Dividend Stock
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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 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.
Stifel Financial in Focus
Based in St. Louis, Stifel Financial (SF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.8%. The brokerage and investment banking firm is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 2.05% compared to the Financial - Investment Bank industry's yield of 0.45% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 16.7% from last year. Over the last 5 years, Stifel Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 42.22%. 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. Stifel's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
SF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $7.04 per share, representing a year-over-year earnings growth rate of 50.43%.
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. That said, they can take comfort from the fact that SF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This is Why Stifel Financial (SF) is a Great Dividend Stock
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 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.
Stifel Financial in Focus
Based in St. Louis, Stifel Financial (SF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.8%. The brokerage and investment banking firm is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 2.05% compared to the Financial - Investment Bank industry's yield of 0.45% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 16.7% from last year. Over the last 5 years, Stifel Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 42.22%. 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. Stifel's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
SF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $7.04 per share, representing a year-over-year earnings growth rate of 50.43%.
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. That said, they can take comfort from the fact that SF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).