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Why Boston Properties (BXP) is a Top Dividend Stock for Your Portfolio
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
Boston Properties in Focus
Headquartered in Boston, Boston Properties (BXP - Free Report) is a Finance stock that has seen a price change of -43.41% so far this year. The real estate investment trust is paying out a dividend of $0.98 per share at the moment, with a dividend yield of 5.02% compared to the REIT and Equity Trust - Other industry's yield of 5.06% and the S&P 500's yield of 2.11%.
In terms of dividend growth, the company's current annualized dividend of $3.92 is up 2.3% from last year. Over the last 5 years, Boston Properties has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.18%. 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, Boston Properties's payout ratio is 55%, which means it paid out 55% of its trailing 12-month EPS as dividend.
BXP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $7.21 per share, which represents a year-over-year growth rate of 2.85%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, BXP 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 Boston Properties (BXP) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
Boston Properties in Focus
Headquartered in Boston, Boston Properties (BXP - Free Report) is a Finance stock that has seen a price change of -43.41% so far this year. The real estate investment trust is paying out a dividend of $0.98 per share at the moment, with a dividend yield of 5.02% compared to the REIT and Equity Trust - Other industry's yield of 5.06% and the S&P 500's yield of 2.11%.
In terms of dividend growth, the company's current annualized dividend of $3.92 is up 2.3% from last year. Over the last 5 years, Boston Properties has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.18%. 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, Boston Properties's payout ratio is 55%, which means it paid out 55% of its trailing 12-month EPS as dividend.
BXP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $7.21 per share, which represents a year-over-year growth rate of 2.85%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, BXP 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).