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.
Headquartered in Seoul, Woori Bank (WF) is a Finance stock that has seen a price change of 80.7% so far this year. Currently paying a dividend of $0.34 per share, the company has a dividend yield of 2.39%. In comparison, the Banks - Foreign industry's yield is 3.02%, while the S&P 500's yield is 1.51%.
Looking at dividend growth, the company's current annualized dividend of $1.35 is up 48% from last year. Over the last 5 years, Woori Bank has increased its dividend 3 times on a year-over-year basis for an average annual increase of 11.20%. 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. Woori Bank's current payout ratio is 17%, meaning it paid out 17% of its trailing 12-month EPS as dividend.
WF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $8.74 per share, with earnings expected to increase 0.58% from the year ago period.
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.
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. That said, they can take comfort from the fact that WF 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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Woori Bank (WF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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