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BOK Financial (BOKF) is a Top Dividend Stock Right Now: Should You Buy?

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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. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

BOK Financial in Focus

BOK Financial (BOKF - Free Report) is headquartered in Tulsa, and is in the Finance sector. The stock has seen a price change of -3.57% since the start of the year. The Regional banking operator is currently shelling out a dividend of $0.57 per share, with a dividend yield of 2.22%. This compares to the Banks - Southwest industry's yield of 1.16% and the S&P 500's yield of 1.57%.

Looking at dividend growth, the company's current annualized dividend of $2.28 is up 2.7% from last year. Over the last 5 years, BOK Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.01%. 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. BOK Financial's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for BOKF for this fiscal year. The Zacks Consensus Estimate for 2025 is $8.60 per share, with earnings expected to increase 4.37% from the year ago period.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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. That said, they can take comfort from the fact that BOKF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).


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