Are You Looking for a High-Growth Dividend Stock?
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Voya Financial in Focus
Headquartered in New York, Voya Financial (VOYA) is a Finance stock that has seen a price change of 12.99% so far this year. The retirement, investment and insurance company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 2.3%. This compares to the Insurance - Life Insurance industry's yield of 0.06% and the S&P 500's yield of 1.7%.
In terms of dividend growth, the company's current annualized dividend of $1.60 is up 100% from last year. In the past five-year period, Voya Financial has increased its dividend 3 times on a year-over-year basis for an average annual increase of 82.68%. 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. Voya's current payout ratio is 9%, meaning it paid out 9% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, VOYA expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $8.04 per share, which represents a year-over-year growth rate of 6.07%.
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. But, not every company offers 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, VOYA 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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Voya Financial, Inc. (VOYA) : Free Stock Analysis Report
