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MGE (MGEE) is a Top Dividend Stock Right Now: Should You 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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
MGE in Focus
Based in Madison, MGE (MGEE - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 8.16%. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 2.19%. In comparison, the Utility - Electric Power industry's yield is 3.76%, while the S&P 500's yield is 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.71 is up 2.4% from last year. In the past five-year period, MGE has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.95%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, MGE's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGEE expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.69 per share, with earnings expected to increase 13.54% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MGEE is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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MGE (MGEE) is a Top Dividend Stock Right Now: Should You Buy?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
MGE in Focus
Based in Madison, MGE (MGEE - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 8.16%. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 2.19%. In comparison, the Utility - Electric Power industry's yield is 3.76%, while the S&P 500's yield is 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.71 is up 2.4% from last year. In the past five-year period, MGE has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.95%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, MGE's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGEE expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.69 per share, with earnings expected to increase 13.54% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MGEE is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).