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Why BlackRock (BLK) 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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
BlackRock in Focus
Based in New York, BlackRock (BLK - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 21.93%. The investment firm is currently shelling out a dividend of $3.3 per share, with a dividend yield of 2.76%. This compares to the Financial - Investment Management industry's yield of 2.98% and the S&P 500's yield of 1.87%.
In terms of dividend growth, the company's current annualized dividend of $13.20 is up 9.8% from last year. In the past five-year period, BlackRock has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.18%. 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, BlackRock's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
BLK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $27.67 per share, representing a year-over-year earnings growth rate of 2.75%.
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.
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 must be conscious 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 BLK 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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Why BlackRock (BLK) 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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
BlackRock in Focus
Based in New York, BlackRock (BLK - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 21.93%. The investment firm is currently shelling out a dividend of $3.3 per share, with a dividend yield of 2.76%. This compares to the Financial - Investment Management industry's yield of 2.98% and the S&P 500's yield of 1.87%.
In terms of dividend growth, the company's current annualized dividend of $13.20 is up 9.8% from last year. In the past five-year period, BlackRock has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.18%. 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, BlackRock's payout ratio is 49%, which means it paid out 49% of its trailing 12-month EPS as dividend.
BLK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $27.67 per share, representing a year-over-year earnings growth rate of 2.75%.
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.
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 must be conscious 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 BLK is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).