Yahoo Finance Why Banco Bilbao (BBVA) 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 when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Banco Bilbao in Focus
Banco Bilbao (BBVA) is headquartered in Madrid, and is in the Finance sector. The stock has seen a price change of 19.76% since the start of the year. Currently paying a dividend of $0.34 per share, the company has a dividend yield of 6.21%. In comparison, the Banks - Foreign industry's yield is 4.44%, while the S&P 500's yield is 1.57%.
Looking at dividend growth, the company's current annualized dividend of $0.68 is up 65% from last year. Banco Bilbao has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 9.25%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Banco Bilbao's payout ratio is 19%, which means it paid out 19% of its trailing 12-month EPS as dividend.
BBVA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $1.59 per share, representing a year-over-year earnings growth rate of 13.57%.
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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BBVA 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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Banco Bilbao Viscaya Argentaria S.A. (BBVA) : Free Stock Analysis Report
