- Oops!Something went wrong.Please try again later.
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.
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.
Kilroy Realty in Focus
Headquartered in Los Angeles, Kilroy Realty (KRC) is a Finance stock that has seen a price change of -3.7% so far this year. The real estate investment trust is paying out a dividend of $0.52 per share at the moment, with a dividend yield of 3.25% compared to the REIT and Equity Trust - Other industry's yield of 3.21% and the S&P 500's yield of 1.36%.
In terms of dividend growth, the company's current annualized dividend of $2.08 is up 2% from last year. Over the last 5 years, Kilroy Realty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.49%. 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, Kilroy Realty's payout ratio is 55%, which means it paid out 55% of its trailing 12-month EPS as dividend.
KRC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $4.35 per share, representing a year-over-year earnings growth rate of 11.83%.
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, KRC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong 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
Kilroy Realty Corporation (KRC) : Free Stock Analysis Report
To read this article on Zacks.com click here.