This combination is difficult to find in the stock market, after so many years of low interest rates. Low interest rates increase the share prices of many high dividend stocks, reducing their yields.
The trade off between growth and dividends makes it difficult to find stocks with both a high payout ratio and solid growth prospects. The more a company pays out in dividends, the less it has to reinvest in growth.
Management must be very efficient with its capital allocation policies to have both a high dividend payout ratio and solid growth prospects. There is little room for error.
Businesses with long dividend histories have proven the stability of their operations. This article analyzes 4 consistently high paying dividend stocks, as ranked using expected total returns from the Sure Analysis Research Database.
We expect annual returns of 14.0% for FNF stock, comprised of 2% earnings growth, the 4.2% dividend yield, and a 7.8% annual boost from an expanding P/E multiple.