This is Why Kilroy Realty (KRC) is a Great Dividend Stock

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.

Kilroy Realty in Focus

Headquartered in Los Angeles, Kilroy Realty (KRC) is a Finance stock that has seen a price change of 19.78% so far this year. The real estate investment trust is currently shelling out a dividend of $0.46 per share, with a dividend yield of 2.42%. This compares to the REIT and Equity Trust - Other industry's yield of 4.21% and the S&P 500's yield of 1.99%.

Looking at dividend growth, the company's current annualized dividend of $1.82 is up 1.7% from last year. In the past five-year period, Kilroy Realty has increased its dividend 3 times on a year-over-year basis for an average annual increase of 7.16%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Kilroy Realty's payout ratio is 52%, which means it paid out 52% of its trailing 12-month EPS as dividend.

KRC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $3.70 per share, representing a year-over-year earnings growth rate of 6.21%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KRC 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
 
Kilroy Realty Corporation (KRC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.