All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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.
Banco Bilbao (BBVA) is headquartered in Madrid, and is in the Finance sector. The stock has seen a price change of 3.65% since the start of the year. The bank is currently shelling out a dividend of $0.57 per share, with a dividend yield of 4.71%. This compares to the Banks - Foreign industry's yield of 2.73% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $1.14 is up 69.9% from last year. Over the last 5 years, Banco Bilbao has increased its dividend 4 times on a year-over-year basis for an average annual increase of 41.97%. 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. Banco Bilbao's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.
BBVA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $2.38 per share, with earnings expected to increase 18.41% 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. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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, BBVA presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Banco Bilbao Viscaya Argentaria S.A. (BBVA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).