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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. However, 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.
FNF Group in Focus
Based in Jacksonville, FNF Group (FNF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.31%. The provider of title insurance and mortgage services is currently shelling out a dividend of $0.48 per share, with a dividend yield of 3.51%. This compares to the Insurance - Property and Casualty industry's yield of 0.18% and the S&P 500's yield of 1.59%.
Looking at dividend growth, the company's current annualized dividend of $1.92 is up 4.9% from last year. In the past five-year period, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.30%. 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. FNF Group's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FNF expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $4.67 per share, which represents a year-over-year growth rate of 31.55%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, FNF 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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FNF Group (FNF) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, 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.
FNF Group in Focus
Based in Jacksonville, FNF Group (FNF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.31%. The provider of title insurance and mortgage services is currently shelling out a dividend of $0.48 per share, with a dividend yield of 3.51%. This compares to the Insurance - Property and Casualty industry's yield of 0.18% and the S&P 500's yield of 1.59%.
Looking at dividend growth, the company's current annualized dividend of $1.92 is up 4.9% from last year. In the past five-year period, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.30%. 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. FNF Group's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FNF expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $4.67 per share, which represents a year-over-year growth rate of 31.55%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, FNF 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).