Why Upbound Group (UPBD) is a Top Dividend Stock for Your Portfolio

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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.Upbound Group in FocusUpbound Group (UPBD) is headquartered in Plano, and is in the Finance sector. The stock has seen a price change of -24.72% since the start of the year. The company that leases furniture and appliances with an option to buy is paying out a dividend of $0.39 per share at the moment, with a dividend yield of 7.1% compared to the Financial - Leasing Companies industry's yield of 4.45% and the S&P 500's yield of 1.76%.Looking at dividend growth, the company's current annualized dividend of $1.56 is up 4% from last year. Over the last 5 years, Upbound Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.93%. 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. Right now, Upbound Group's payout ratio is 41%, which means it paid out 41% of its trailing 12-month EPS as dividend.Looking at this fiscal year, UPBD expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $4.10 per share, representing a year-over-year earnings growth rate of 7.05%.Bottom LineFrom greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UPBD 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 Upbound Group, Inc. (UPBD): 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