Yahoo Finance Why FNF Group (FNF) 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.
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 -3.67% since the start of the year. The provider of title insurance and mortgage services is paying out a dividend of $0.48 per share at the moment, with a dividend yield of 3.91% compared to the Insurance - Property and Casualty industry's yield of 0.2% and the S&P 500's yield of 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.92 is up 4.9% from last year. In the past five-year period, FNF Group has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.68%. 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. FNF Group's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
FNF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $4.67 per share, which represents a year-over-year growth rate of 31.55%.
Bottom Line
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.
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, FNF 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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Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report
