雅虎香港財經 Why Shinhan Financial (SHG) 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 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Shinhan Financial in Focus
Based in Seoul, Shinhan Financial (SHG) is in the Finance sector, and so far this year, shares have seen a price change of 10.3%. The financial services company is paying out a dividend of $0.61 per share at the moment, with a dividend yield of 3.61% compared to the Banks - Foreign industry's yield of 4.41% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $1.22 is up 31.6% from last year. Over the last 5 years, Shinhan Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 4.62%. 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. Shinhan Financial's current payout ratio is 20%. This means it paid out 20% of its trailing 12-month EPS as dividend.
SHG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $6.21 per share, representing a year-over-year earnings growth rate of 0.81%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that SHG is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Shinhan Financial Group Co Ltd (SHG) : Free Stock Analysis Report
