Investors aiming for significant returns often focus on a variety of assets, including stocks, bonds, and ETFs. For income investors, however, the main goal is steady cash flow from their investments. This cash flow typically comes from bond interest, other investment interests, and dividends. A dividend is a share of a company’s earnings paid to its shareholders, commonly evaluated through its dividend yield, which is the dividend expressed as a percentage of the current stock price. Research indicates that dividends represent a substantial part of long-term investment returns—often exceeding one-third of total gains.
Korn/Ferry: A Dividend Stock Worth Watching
Company Overview
Korn/Ferry (KFY), based in Los Angeles, operates in the Business Services sector and has seen its stock price rise by 13.9% this year. Currently, the company is offering a dividend of $0.37 per share, resulting in a dividend yield of 2.19%. This yield is notably higher than the Staffing Firms industry’s 1.91% and the S&P 500’s yield of 1.53%.
In terms of growth, Korn/Ferry’s current annual dividend of $1.48 marks a 45.1% increase compared to last year. Over the past five years, the company has boosted its dividend four times, leading to an average annual increase of 29.30%. Future dividend increases will hinge on earnings growth and the payout ratio, which reflects what portion of earnings per share is distributed as dividends. Korn/Ferry’s payout ratio stands at 31%, indicating that it distributed 31% of its earnings per share over the last twelve months in dividends.
Looking ahead, Korn/Ferry expects earnings growth this fiscal year, with the Zacks Consensus Estimate for 2024 set at $4.75 per share. This reflects an anticipated growth rate of 10.98% year-over-year.
Investment Insights
Dividends appeal to investors for numerous reasons, including tax benefits, reduced overall portfolio risk, and enhanced profitability from stock investments. However, not every firm pays dividends. High-growth or tech-startup companies typically forgo dividend payouts. In contrast, larger, well-established companies usually offer more reliable dividends. Income investors should also be cautious; high-yield stocks might struggle during periods of rising interest rates. Given these factors, KFY stands out as a solid investment opportunity. It not only offers a competitive dividend but also holds a Zacks Rank of 3 (Hold), indicating its potential for continued performance.
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Korn/Ferry International (KFY): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
