Are You Looking for a High-Growth Dividend Stock?

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

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.

Based in Jericho, Kimco Realty (KIM) is in the Finance sector, and so far this year, shares have seen a price change of 19.24%. The real estate investment trust is currently shelling out a dividend of $0.26 per share, with a dividend yield of 4.3%. This compares to the REIT and Equity Trust - Retail industry's yield of 3.82% and the S&P 500's yield of 1.44%.

Looking at dividend growth, the company's current annualized dividend of $1.04 is up 3% from last year. Over the last 5 years, Kimco Realty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.37%. 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. Kimco Realty's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, KIM expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $1.83 per share, which represents a year-over-year growth rate of 3.98%.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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, KIM 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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This article originally published on Zacks Investment Research (zacks.com).

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