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Why Sun Life (SLF) is a Top Dividend Stock for Your Portfolio
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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.
Sun Life in Focus
Sun Life (SLF - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 24.52% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 3.67%. In comparison, the Insurance - Life Insurance industry's yield is 0.47%, while the S&P 500's yield is 1.87%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 2.8% from last year. Sun Life has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 4.86%. 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. Right now, Sun Life's payout ratio is 41%, which means it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $3.76 per share, which represents a year-over-year growth rate of 0.27%.
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. With that in mind, SLF 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 Sun Life (SLF) is a Top Dividend Stock for Your Portfolio
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.
Sun Life in Focus
Sun Life (SLF - Free Report) is headquartered in Toronto, and is in the Finance sector. The stock has seen a price change of 24.52% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 3.67%. In comparison, the Insurance - Life Insurance industry's yield is 0.47%, while the S&P 500's yield is 1.87%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 2.8% from last year. Sun Life has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 4.86%. 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. Right now, Sun Life's payout ratio is 41%, which means it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SLF expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $3.76 per share, which represents a year-over-year growth rate of 0.27%.
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. With that in mind, SLF 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).