Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BB&T in Focus
BB&T is headquartered in Winston-Salem, and is in the Finance sector. The stock has seen a price change of 12.81% since the start of the year. The regional banking company is paying out a dividend of $0.41 per share at the moment, with a dividend yield of 3.31% compared to the Banks - Major Regional industry's yield of 2.9% and the S&P 500's yield of 1.97%.
In terms of dividend growth, the company's current annualized dividend of $1.62 is up 3.8% from last year. In the past five-year period, BB&T has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.92%. 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. BB&T's current payout ratio is 40%. This means it paid out 40% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BBT for this fiscal year. The Zacks Consensus Estimate for 2019 is $4.36 per share, which represents a year-over-year growth rate of 11.51%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BBT 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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This is Why BB&T (BBT) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BB&T in Focus
BB&T is headquartered in Winston-Salem, and is in the Finance sector. The stock has seen a price change of 12.81% since the start of the year. The regional banking company is paying out a dividend of $0.41 per share at the moment, with a dividend yield of 3.31% compared to the Banks - Major Regional industry's yield of 2.9% and the S&P 500's yield of 1.97%.
In terms of dividend growth, the company's current annualized dividend of $1.62 is up 3.8% from last year. In the past five-year period, BB&T has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.92%. 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. BB&T's current payout ratio is 40%. This means it paid out 40% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BBT for this fiscal year. The Zacks Consensus Estimate for 2019 is $4.36 per share, which represents a year-over-year growth rate of 11.51%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BBT 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).