Are You Looking for a High-Growth Dividend Stock?

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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Kilroy Realty in Focus

Headquartered in Los Angeles, Kilroy Realty (KRC) is a Finance stock that has seen a price change of -19.31% so far this year. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 3.88%. In comparison, the REIT and Equity Trust - Other industry's yield is 3.98%, while the S&P 500's yield is 1.74%.

Looking at dividend growth, the company's current annualized dividend of $2.08 is up 2% from last year. Over the last 5 years, Kilroy Realty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.70%. 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. Kilroy Realty's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.

KRC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $4.53 per share, representing a year-over-year earnings growth rate of 16.45%.

Bottom Line

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, KRC 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).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Kilroy Realty Corporation (KRC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.