Yahoo Finance Why Banco Bilbao (BBVA) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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.
Banco Bilbao in Focus
Based in Madrid, Banco Bilbao (BBVA) is in the Finance sector, and so far this year, shares have seen a price change of 8.56%. Currently paying a dividend of $0.34 per share, the company has a dividend yield of 6.85%. In comparison, the Banks - Foreign industry's yield is 4.62%, while the S&P 500's yield is 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.68 is up 65% from last year. Over the last 5 years, Banco Bilbao has increased its dividend 2 times on a year-over-year basis for an average annual increase of 9.25%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Banco Bilbao's current payout ratio is 19%. This means it paid out 19% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BBVA expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.59 per share, which represents a year-over-year growth rate of 13.57%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, BBVA 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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Banco Bilbao Viscaya Argentaria S.A. (BBVA) : Free Stock Analysis Report
