Yahoo Finance FNF Group (FNF) is a Top Dividend Stock Right Now: Should You Buy?
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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
FNF Group in Focus
FNF Group (FNF) is headquartered in Jacksonville, and is in the Finance sector. The stock has seen a price change of -3.1% since the start of the year. Currently paying a dividend of $0.48 per share, the company has a dividend yield of 3.88%. In comparison, the Insurance - Property and Casualty industry's yield is 0.19%, while the S&P 500's yield is 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.92 is up 4.9% from last year. Over the last 5 years, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.68%. 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. FNF Group's current payout ratio is 55%, meaning it paid out 55% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FNF expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $4.81 per share, representing a year-over-year earnings growth rate of 35.49%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FNF 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).
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Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report
