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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.
BankUnited, Inc. In Focus
Based in Miami Lakes, BankUnited, Inc. (BKU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.63%. Currently paying a dividend of $0.29 per share, the company has a dividend yield of 3.02%. In comparison, the Banks - Major Regional industry's yield is 3.25%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.16 is up 9.4% from last year. In the past five-year period, BankUnited, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.21%. 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. Right now, BankUnited's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BKU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.86 per share, with earnings expected to increase 1.06% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. With that in mind, BKU 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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Are You Looking for a High-Growth 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.
BankUnited, Inc. In Focus
Based in Miami Lakes, BankUnited, Inc. (BKU - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 18.63%. Currently paying a dividend of $0.29 per share, the company has a dividend yield of 3.02%. In comparison, the Banks - Major Regional industry's yield is 3.25%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.16 is up 9.4% from last year. In the past five-year period, BankUnited, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.21%. 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. Right now, BankUnited's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BKU expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.86 per share, with earnings expected to increase 1.06% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. With that in mind, BKU 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).