Yahoo Finance Why Stifel Financial (SF) is a Great Dividend Stock Right Now
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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
Stifel Financial in Focus
Based in St. Louis, Stifel Financial (SF) is in the Finance sector, and so far this year, shares have seen a price change of 10.76%. The brokerage and investment banking firm is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 2.19% compared to the Financial - Investment Bank industry's yield of 0.42% and the S&P 500's yield of 1.54%.
Looking at dividend growth, the company's current annualized dividend of $1.68 is up 16.7% from last year. Stifel Financial has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 42.22%. 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, Stifel's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SF for this fiscal year. The Zacks Consensus Estimate for 2024 is $7.04 per share, which represents a year-over-year growth rate of 50.43%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. That said, they can take comfort from the fact that SF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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
Stifel Financial Corporation (SF) : Free Stock Analysis Report
