Latest news with #incomeInvesting
Yahoo
2 days ago
- Business
- Yahoo
Why First Busey (BUSE) is a Great Dividend Stock Right Now
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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases. First Busey (BUSE) is headquartered in Leawood, and is in the Finance sector. The stock has seen a price change of -5.69% since the start of the year. Currently paying a dividend of $0.25 per share, the company has a dividend yield of 4.5%. In comparison, the Banks - Midwest industry's yield is 3.17%, while the S&P 500's yield is 1.56%. Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. Over the last 5 years, First Busey has increased its dividend 3 times on a year-over-year basis for an average annual increase of 2.21%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. First Busey's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend. Earnings growth looks solid for BUSE for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.54 per share, representing a year-over-year earnings growth rate of 22.12%. 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. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BUSE 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). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Busey Corporation (BUSE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Entrepreneur
24-05-2025
- Business
- Entrepreneur
Pfizer's 7.5% Dividend: Income Haven or House of Cards?
This story originally appeared on MarketBeat [content-module:CompanyOverview|NYSE:PFE] A dividend yield that surpasses 7.5% from a pharmaceutical sector giant like Pfizer Inc. (NYSE: PFE) certainly catches the eye of income-seeking investors. Such a substantial return often signals a mature, stable company generously rewarding its shareholders. However, a closer look reveals a complex picture for the New York-based drugmaker. Does this impressive payout actually represent a secure income stream, or does it mask underlying concerns regarding the company's future growth trajectory and financial resilience as it continues to evolve in a rapidly transforming healthcare sector? Unpacking Pfizer's 7.5% Promise Pfizer's commitment to returning capital to shareholders is evident in its current annual dividend of $1.72 per share. This translates to a quarterly payment of $0.43 per share. As of May 22, 2025, this payout results in a dividend yield of 7.5%. For context, the dividend yield represents the annual dividend payment as a percentage of the stock's current price, offering a measure of the income return an investor can expect. [content-module:DividendStats|NYSE:PFE] Pfizer has a noteworthy track record, having increased its dividend for 16 consecutive years, a history that often appeals to investors looking for reliable and growing income. Crucial to assessing any dividend's reliability is an understanding of the company's payout ratios. The dividend payout ratio measures the proportion of earnings or cash flow paid out to shareholders as dividends. Pfizer's dividend consumes approximately 47.69% of its cash flow. A payout ratio below 100% based on cash flow generally suggests that a company is generating sufficient cash to cover its dividend payments, which is a positive sign for sustainability. However, when looking at its trailing 12-month earnings, the payout ratio stands at a much higher 124.64%. This figure indicates that, based on recently reported profits, the company paid out more dividends than it earned. This disparity highlights the importance of future earnings growth and cost management in maintaining the dividend at current levels. The Revenue Squeeze: Pfizer's Top-Line Test Pfizer's recent financial performance reveals shifting revenue dynamics. In the first quarter of 2025, total revenues decreased by 8% year-over-year to $13.7 billion, primarily due to a sharp 75% drop in Paxlovid sales as COVID-19 demand normalized, creating challenging growth comparisons. Beyond this, Pfizer faces a significant long-term hurdle: the company is at the edge of an impending patent cliff. Key drugs like Eliquis (losing exclusivity in April 2028), Prevnar, Ibrance, and Xtandi (facing competition in 2026-2027) are expected to cause an annual revenue loss of $17-$18 billion between 2026 and 2028. This type of revenue threat requires that Pfizer create a strong defensive strategy to develop new revenue streams. How Pfizer Aims to Refill Its Revenue Engine In response to these revenue pressures, Pfizer is actively pursuing a strategy centered on pipeline rejuvenation, with a pronounced focus on oncology. A cornerstone of this strategy was the $43 billion acquisition of Seagen in March 2023. This acquisition significantly built upon Pfizer's capabilities in antibody-drug conjugates, a promising class of cancer treatments, and Seagen's portfolio contributed $3.4 billion to Pfizer's revenue in fiscal year 2024. More recently, in May 2025, Pfizer entered into an exclusive global licensing agreement (excluding China) with 3SBio, Inc. for SSGJ-707, an investigational bispecific antibody targeting PD-1 and VEGF for multiple cancer types. The deal includes a $1.25 billion upfront payment and could be worth up to $6 billion in total, underscoring Pfizer's commitment to sourcing external innovation. The company aims to launch eight new cancer medicines by 2030. Positive developments in the oncology pipeline include a U.S. Food and Drug Administration (FDA) approval for Adcetris in large B-cell lymphoma and encouraging clinical data for Padcev in urothelial cancer. Talzenna also showed positive overall survival data in prostate cancer, though an FDA advisory panel has raised questions about its broader application. Outside of oncology, the Abrysvo RSV vaccine has seen expanded recommendations in Europe and the U.S., potentially increasing its market reach. However, the path of drug development is not without setbacks, as evidenced by the discontinuation of the oral GLP-1 candidate danuglipron in April 2025. Pfizer's Payout: A Sustainable Reward or a Yield Trap? [content-module:Forecast|NYSE:PFE] Pfizer's current 7.5% dividend yield undeniably offers an excellent income component for investment portfolios. This payout is backed by a history of consistent growth and, importantly, by the company's cash flow generation. However, this attractive yield exists within a context of significant operational and strategic challenges. The decline in revenues from COVID-19 products and the impending loss of exclusivity for several major drugs create a considerable hurdle for future top-line growth. As concerning as that might seem, the company is not standing still; aggressive cost-cutting measures are underway, and significant investments are being made to rejuvenate the pipeline, particularly in the high-potential oncology sector. The success of these strategic plan executions will be critical in determining Pfizer's ability to navigate the upcoming patent expirations and to return to a path of sustainable revenue and earnings growth. For investors, the decision hinges on balancing the allure of the current high yield against the uncertainties tied to Pfizer's multi-year transition. The long-term viability of the dividend at its current relative level will ultimately depend on the successful execution of its growth strategy. Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now... See The Five Stocks Here
Yahoo
23-05-2025
- Business
- Yahoo
First Commonwealth Financial (FCF) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. 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 Indiana, First Commonwealth Financial (FCF) is a Finance stock that has seen a price change of -5.08% so far this year. The financial holding company is currently shelling out a dividend of $0.14 per share, with a dividend yield of 3.36%. This compares to the Banks - Northeast industry's yield of 2.82% and the S&P 500's yield of 1.53%. In terms of dividend growth, the company's current annualized dividend of $0.54 is up 4.9% from last year. In the past five-year period, First Commonwealth Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 4.10%. 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. First Commonwealth Financial's current payout ratio is 39%. This means it paid out 39% of its trailing 12-month EPS as dividend. FCF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $1.41 per share, which represents a year-over-year growth rate of 0.71%. 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. 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 FCF is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Commonwealth Financial Corporation (FCF) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
