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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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Morgan Stanley in Focus
Morgan Stanley (MS - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 11.98% since the start of the year. The investment bank is paying out a dividend of $0.93 per share at the moment, with a dividend yield of 3.54% compared to the Financial - Investment Bank industry's yield of 0.73% and the S&P 500's yield of 1.5%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.70 is up 13.8% from last year. In the past five-year period, Morgan Stanley has increased its dividend 3 times on a year-over-year basis for an average annual increase of 28.06%. 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. Morgan Stanley's current payout ratio is 54%, meaning it paid out 54% of its trailing 12-month EPS as dividend.
MS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $7.02 per share, which represents a year-over-year growth rate of 28.57%.
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. It's important to keep in mind that not all companies provide 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, MS 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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Morgan Stanley (MS) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Morgan Stanley in Focus
Morgan Stanley (MS - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of 11.98% since the start of the year. The investment bank is paying out a dividend of $0.93 per share at the moment, with a dividend yield of 3.54% compared to the Financial - Investment Bank industry's yield of 0.73% and the S&P 500's yield of 1.5%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.70 is up 13.8% from last year. In the past five-year period, Morgan Stanley has increased its dividend 3 times on a year-over-year basis for an average annual increase of 28.06%. 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. Morgan Stanley's current payout ratio is 54%, meaning it paid out 54% of its trailing 12-month EPS as dividend.
MS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $7.02 per share, which represents a year-over-year growth rate of 28.57%.
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. It's important to keep in mind that not all companies provide 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, MS 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).