Why The Bank of New York Mellon Corporation (BK) is a Great Dividend Stock Right Now

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.The Bank of New York Mellon Corporation in FocusHeadquartered in New York, The Bank of New York Mellon Corporation (BK) is a Finance stock that has seen a price change of 10.96% so far this year. The company is currently shelling out a dividend of $0.47 per share, with a dividend yield of 2.21%. This compares to the Banks - Major Regional industry's yield of 3.55% and the S&P 500's yield of 1.57%.In terms of dividend growth, the company's current annualized dividend of $1.88 is up 5.6% from last year. The Bank of New York Mellon Corporation has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 9.74%. 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. The Bank of New York Mellon's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.Earnings growth looks solid for BK for this fiscal year. The Zacks Consensus Estimate for 2025 is $6.96 per share, which represents a year-over-year growth rate of 15.42%.Bottom LineInvestors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BK 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).Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 The Bank of New York Mellon Corporation (BK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks