We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Kroger in Focus
Headquartered in Cincinnati, Kroger (KR - Free Report) is a Retail-Wholesale stock that has seen a price change of -6.83% so far this year. The supermarket chain is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 2.47% compared to the Retail - Supermarkets industry's yield of 1.67% and the S&P 500's yield of 1.81%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.04 is up 33.3% from last year. In the past five-year period, Kroger has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.15%. 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. Kroger's current payout ratio is 21%, meaning it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, KR expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.06 per share, with earnings expected to increase 10.33% from the year ago period.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KR 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).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are You Looking for a High-Growth Dividend Stock?
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Kroger in Focus
Headquartered in Cincinnati, Kroger (KR - Free Report) is a Retail-Wholesale stock that has seen a price change of -6.83% so far this year. The supermarket chain is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 2.47% compared to the Retail - Supermarkets industry's yield of 1.67% and the S&P 500's yield of 1.81%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.04 is up 33.3% from last year. In the past five-year period, Kroger has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.15%. 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. Kroger's current payout ratio is 21%, meaning it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, KR expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.06 per share, with earnings expected to increase 10.33% from the year ago period.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KR 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).