Booking Holdings' dividend recently yielded 0.84%.
That's not a large yield, but the company has been growing its dividend.
Booking Holdings (NASDAQ: BKNG) has become an online travel powerhouse, with a recent market value of $147 billion. Its platforms include familiar names such as Booking.com, Priceline, Agoda, and OpenTable. It's also a dividend-paying stock, with its payout recently yielding 0.84%.
That may seem like a rather anemic yield, but note that management has been increasing the dividend. In 2024, Booking Holdings paid out a total of $1.40 per share, and it's now paying $1.68 per share annually. Assuming its policy of payout hikes continues, those who buy into the stock now will collect increasing sums from the stock over time, with the effective yield rising.
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Better still, Booking Holdings' total yield, which factors in share buybacks, was recently a hefty 7.85%, suggesting plenty of shareholder rewards beyond that 0.84%.
If you're looking for, say, $1,000 in annual income from a position in Booking Holdings, how many shares would you need to buy? A little simple math will tell you: Divide $1,000 by the current annual dividend of $1.68, and you get 595 shares. At a recent stock price of $195, that would cost you about $116,000.
But should you invest in Booking Holdings? There are some solid reasons to. It's a big player in the online travel world, and consumers are increasingly turning to apps to conduct all kinds of transactions, and Booking Holdings is ready to help them book flights, hotel rooms, restaurant reservations, and more. As more people enter the middle class globally, that will help the company grow further. There are some risks, though. For example, another pandemic could curtail travel for an extended period.
Meanwhile, the stock seems roughly fairly valued. Its recent forward price-to-earnings (P/E) ratio of 19 was on par with its five-year average.
Note, too, that there are plenty of other investments that also offer significant dividend income. A good dividend-focused ETF, for example, will offer both regular payouts and diversification.
Before you buy stock in Booking Holdings, consider this:
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings. The Motley Fool has a disclosure policy.