FactSet Research Systems Inc.

New York Stock Exchange
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Slightly Bullish +25

Why FactSet Research (FDS) is a Great Dividend Stock Right Now

AI-generated analysis

💰 FactSet Research (FDS) offers a current dividend yield of 2.24%, significantly outperforming the Business - Information Services industry average of 0.85% and the S&P 500's 1.5%.

📉 Despite strong dividend metrics, FDS shares have declined by approximately 32.37% this year due to market volatility.

🚀 The company demonstrates a track record of increasing its dividend 5 times over the last 5 years with an average annual increase of 8.04%.

💵 FactSet pays out only 26% of its trailing 12-month earnings as dividends, indicating a healthy payout ratio and room for future growth.

📈 Analysts project EPS to reach $17.42 in 2026, representing a modest but solid year-over-year earnings growth rate of 2.59%.

🔍 The Zacks Consensus Rank assigns FDS a #2 (Buy) rating, suggesting strong potential for continued performance.

📉 High-yield stocks like FDS may face pressure during rising interest rates, making the current yield attractive in this macro environment.

🏛️ Based in Norwalk, FactSet operates within the Business Services sector as a provider of financial data and analytics solutions.

Bullish Signals
  • FactSet Research (FDS) offers an attractive dividend yield of 2.24%, which significantly outperforms the Business - Information Services industry average of 0.85% and the S&P 500's yield of 1.5%.
  • The company has increased its dividend 5 times year-over-year over the last 5 years with an average annual increase of 8.04%, demonstrating a strong commitment to returning value to shareholders.
  • FactSet Research's current payout ratio is 26%, indicating a sustainable dividend strategy with room for future growth dependent on earnings expansion.
  • Earnings growth outlook remains solid with a Zacks Consensus Estimate for 2026 of $17.42 per share, representing a positive year-over-year growth rate of 2.59%.
  • The stock holds a strong Zacks Rank of #2 (Buy), signaling investor confidence and potential upside based on fundamental analysis.
Risk Factors
  • Shares have declined significantly by -32.37% year-to-date.
  • High-yielding stocks like FDS tend to struggle during periods of rising interest rates, which could negatively impact performance.
Full Analysis
For income investors seeking consistent cash flow, dividends play a critical role in long-term portfolio returns, often accounting for over one-third of total gains. FactSet Research Systems Inc. (FDS), based in Norwalk and operating within the Business Services sector, currently stands out as a potential dividend investment despite its shares dropping 32.37% year-to-date. The company offers an annualized dividend of $1.10 per share, resulting in a yield of 2.24%, which significantly outpaces both the Business - Information Services industry average yield of 0.85% and the S&P 500's yield of 1.5%. This positioning makes FDS an attractive option for investors looking to generate superior income relative to its peers. Beyond current income, FactSet demonstrates a commitment to paying growing returns, with the current annualized dividend totaling $4.40, representing a 2.8% increase from the previous year. Historically, FactSet has raised its dividend five times over the last five years on a year-over-year basis, achieving an average annual increase of 8.04%. This growth potential is supported by the company's current payout ratio of 26%, indicating that it pays out just over a quarter of its trailing 12-month earnings per share as dividends, leaving ample room for future expansion based on earnings performance. Financial projections suggest solid earnings growth with the Zacks Consensus Estimate predicting $17.42 per share for 2026, which represents a year-over-year growth rate of 2.59%. Analysts note that while high-growth tech firms often forgo dividends in favor of reinvestment, larger, established companies like FactSet typically provide more secure income options. The stock also carries a strong Zacks Rank of #2 (Buy), highlighting its status as a compelling investment opportunity that balances dividend appeal with earnings stability. However, investors should remain mindful that high-yielding stocks can be sensitive during periods of rising interest rates, requiring careful consideration within a diversified portfolio strategy.