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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Tronox (TROX - Free Report) is headquartered in Grimsby, and is in the Basic Materials sector. The stock has seen a price change of -31.5% since the start of the year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 3.04%. In comparison, the Chemical - Diversified industry's yield is 1.9%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. In the past five-year period, Tronox has increased its dividend 3 times on a year-over-year basis for an average annual increase of 26.33%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Tronox's current payout ratio is 19%, meaning it paid out 19% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TROX expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.27 per share, representing a year-over-year earnings growth rate of 42.79%.
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. However, not all companies offer 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, TROX presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Tronox (TROX - Free Report) is headquartered in Grimsby, and is in the Basic Materials sector. The stock has seen a price change of -31.5% since the start of the year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 3.04%. In comparison, the Chemical - Diversified industry's yield is 1.9%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. In the past five-year period, Tronox has increased its dividend 3 times on a year-over-year basis for an average annual increase of 26.33%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Tronox's current payout ratio is 19%, meaning it paid out 19% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TROX expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.27 per share, representing a year-over-year earnings growth rate of 42.79%.
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. However, not all companies offer 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, TROX presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).