Why Woori Bank (WF) is a Top Dividend Stock for Your Portfolio

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.

Based in Seoul, Woori Bank (WF) is in the Finance sector, and so far this year, shares have seen a price change of 73.5%. Currently paying a dividend of $0.34 per share, the company has a dividend yield of 2.49%. In comparison, the Banks - Foreign industry's yield is 3.11%, while the S&P 500's yield is 1.52%.

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, which represents a year-over-year growth rate of 0.58%.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 its 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, WF 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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