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Brandywine Realty Trust (BDN) is a Top Dividend Stock Right Now: Should You Buy?

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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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Brandywine Realty Trust in Focus

Brandywine Realty Trust (BDN - Free Report) is headquartered in Philadelphia, and is in the Finance sector. The stock has seen a price change of 13.99% since the start of the year. The real estate investment trust is currently shelling out a dividend of $0.19 per share, with a dividend yield of 5.18%. This compares to the REIT and Equity Trust - Other industry's yield of 4.18% and the S&P 500's yield of 1.91%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.76 is up 5.6% from last year. Over the last 5 years, Brandywine Realty Trust has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.66%. 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, Brandywine Realty Trust's payout ratio is 54%, which means it paid out 54% of its trailing 12-month EPS as dividend.

BDN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $1.42 per share, with earnings expected to increase 3.65% 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. It's important to keep in mind that not all companies provide 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, BDN 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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