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Why Voya Financial (VOYA) is a Great Dividend Stock Right Now
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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Voya Financial in Focus
Headquartered in New York, Voya Financial (VOYA - Free Report) is a Finance stock that has seen a price change of -10.35% so far this year. The retirement, investment and insurance company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 2.45%. This compares to the Insurance - Life Insurance industry's yield of 1.34% and the S&P 500's yield of 1.63%.
Looking at dividend growth, the company's current annualized dividend of $1.60 is up 29% from last year. Over the last 5 years, Voya Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 23.58%. 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. Voya's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, VOYA expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $8.30 per share, with earnings expected to increase 3.36% 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. However, not all companies offer 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VOYA 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 Voya Financial (VOYA) is a Great Dividend Stock Right Now
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Voya Financial in Focus
Headquartered in New York, Voya Financial (VOYA - Free Report) is a Finance stock that has seen a price change of -10.35% so far this year. The retirement, investment and insurance company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 2.45%. This compares to the Insurance - Life Insurance industry's yield of 1.34% and the S&P 500's yield of 1.63%.
Looking at dividend growth, the company's current annualized dividend of $1.60 is up 29% from last year. Over the last 5 years, Voya Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 23.58%. 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. Voya's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, VOYA expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $8.30 per share, with earnings expected to increase 3.36% 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. However, not all companies offer 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VOYA 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).