Why BOK Financial (BOKF) 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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.

Based in Tulsa, BOK Financial (BOKF) is in the Finance sector, and so far this year, shares have seen a price change of 6%. The Regional banking operator is currently shelling out a dividend of $0.57 per share, with a dividend yield of 2.02%. This compares to the Banks - Southwest industry's yield of 1.28% and the S&P 500's yield of 1.52%.

Looking at dividend growth, the company's current annualized dividend of $2.28 is up 2.7% from last year. Over the last 5 years, BOK Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.17%. 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. BOK Financial's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.

BOKF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $8.35 per share, representing a year-over-year earnings growth rate of 1.33%.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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. With that in mind, BOKF 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).

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This article originally published on Zacks Investment Research (zacks.com).

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Source Zacks-com