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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Kilroy Realty in Focus
Based in Los Angeles, Kilroy Realty (KRC) is in the Finance sector, and so far this year, shares have seen a price change of -24.08%. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 4.12%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.01%, while the S&P 500's yield is 1.75%.
Looking at dividend growth, the company's current annualized dividend of $2.08 is up 2% from last year. Kilroy Realty has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 4.53%. 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. Kilroy Realty's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for KRC for this fiscal year. The Zacks Consensus Estimate for 2022 is $4.53 per share, with earnings expected to increase 16.45% 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. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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).
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Kilroy Realty Corporation (KRC) : Free Stock Analysis Report
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