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The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock Right Now: Should You Buy?
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
The Bank of New York Mellon Corporation in Focus
Headquartered in New York, The Bank of New York Mellon Corporation (BK - Free Report) is a Finance stock that has seen a price change of 21.96% so far this year. Currently paying a dividend of $0.42 per share, the company has a dividend yield of 2.65%. In comparison, the Banks - Major Regional industry's yield is 3.51%, while the S&P 500's yield is 1.56%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 6.3% 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 7.84%. 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. Right now, The Bank of New York Mellon's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.56 per share, representing a year-over-year earnings growth rate of 10.10%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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, BK presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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The Bank of New York Mellon Corporation (BK) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
The Bank of New York Mellon Corporation in Focus
Headquartered in New York, The Bank of New York Mellon Corporation (BK - Free Report) is a Finance stock that has seen a price change of 21.96% so far this year. Currently paying a dividend of $0.42 per share, the company has a dividend yield of 2.65%. In comparison, the Banks - Major Regional industry's yield is 3.51%, while the S&P 500's yield is 1.56%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 6.3% 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 7.84%. 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. Right now, The Bank of New York Mellon's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
BK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.56 per share, representing a year-over-year earnings growth rate of 10.10%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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, BK presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).