Banco Itau’s stock sees 17.41% year-to-date increase, dividend growth promising

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By News Room 2 Min Read


The Sao Paulo-based financial institution, Banco Itau, has witnessed a significant surge in its stock price since the start of the year. As of Wednesday, the firm’s stocks have risen by 17.41%. The company’s current dividend yield stands at 4.09%, a figure to be compared with the foreign banks industry average of 4.61% and the ‘s yield of 1.7%.

Banco Itau’s dividend growth has been particularly noteworthy. The financial institution’s current annualized dividend is at $0.23 per share, a substantial increase of 48.4% from the previous year. Over the past five years, Banco Itau has thrice raised its dividend on a year-over-year basis, resulting in an average annual increase of 10.24%.

The payout ratio, which denotes the proportion of a company’s annual earnings per share paid out as dividends, plays a pivotal role in future dividend growth along with earnings growth. For Banco Itau, the current payout ratio is at 37%, indicating that it distributed 37% of its trailing 12-month EPS as dividends.

Looking ahead to this fiscal year, Banco Itau forecasts robust earnings growth. The consensus estimate for 2023 is $0.73 per share, which would signify a year-over-year earnings growth rate of 19.67%.

Dividends are often favored by income investors who aim to generate consistent cash flow from their liquid investments. Numerous academic studies suggest that dividends can constitute significant portions of long-term returns, often exceeding one-third of total returns.

However, it is important to note that not all companies offer a quarterly payout. Dividends can also provide various benefits such as tax advantages, reducing overall portfolio risk, and significantly enhancing stock investing profits.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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