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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Goldman Sachs in Focus
Based in New York, Goldman Sachs (GS) is in the Finance sector, and so far this year, shares have seen a price change of -8.31%. The investment bank is currently shelling out a dividend of $2.5 per share, with a dividend yield of 3.18%. This compares to the Financial - Investment Bank industry's yield of 0.5% and the S&P 500's yield of 1.81%.
In terms of dividend growth, the company's current annualized dividend of $10 is up 11.1% from last year. In the past five-year period, Goldman Sachs has increased its dividend 4 times on a year-over-year basis for an average annual increase of 29.39%. 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. Goldman's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GS expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $33.14 per share, with earnings expected to increase 10.25% from the year ago period.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GS 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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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
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