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Why Allstate (ALL) is a Top Dividend Stock for Your Portfolio
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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. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Allstate in Focus
Based in Northbrook, Allstate (ALL - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 13.39%. Currently paying a dividend of $0.92 per share, the company has a dividend yield of 2.32%. In comparison, the Insurance - Property and Casualty industry's yield is 0.19%, while the S&P 500's yield is 1.6%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.68 is up 3.4% from last year. Over the last 5 years, Allstate has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.08%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Allstate's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
ALL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $12.15 per share, which represents a year-over-year growth rate of 1,178.95%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, ALL 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 Allstate (ALL) is a Top Dividend Stock for Your Portfolio
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Allstate in Focus
Based in Northbrook, Allstate (ALL - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 13.39%. Currently paying a dividend of $0.92 per share, the company has a dividend yield of 2.32%. In comparison, the Insurance - Property and Casualty industry's yield is 0.19%, while the S&P 500's yield is 1.6%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.68 is up 3.4% from last year. Over the last 5 years, Allstate has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.08%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Allstate's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
ALL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $12.15 per share, which represents a year-over-year growth rate of 1,178.95%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, ALL 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).