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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
IdaCorp in Focus
IdaCorp (IDA - Free Report) is headquartered in Boise, and is in the Utilities sector. The stock has seen a price change of 5.4% since the start of the year. Currently paying a dividend of $2.36 per share, the company has a dividend yield of 52%. In comparison, the Utility - Electric Power industry's yield is 1.66%, while the S&P 500's yield is 0.59%.
Looking at dividend growth, the company's current annualized dividend of $2.85 is up 8.6% from last year. IdaCorp has increased its dividend 7.30 times on a year-over-year basis over the last 5 years for an average annual increase of 5%. 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. IdaCorp's current payout ratio is 9.51%, meaning it paid out 9.51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IDA expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $2.36 per share, with earnings expected to increase 4.38% 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. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 IDA 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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Why IdaCorp (IDA) is a Top Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
IdaCorp in Focus
IdaCorp (IDA - Free Report) is headquartered in Boise, and is in the Utilities sector. The stock has seen a price change of 5.4% since the start of the year. Currently paying a dividend of $2.36 per share, the company has a dividend yield of 52%. In comparison, the Utility - Electric Power industry's yield is 1.66%, while the S&P 500's yield is 0.59%.
Looking at dividend growth, the company's current annualized dividend of $2.85 is up 8.6% from last year. IdaCorp has increased its dividend 7.30 times on a year-over-year basis over the last 5 years for an average annual increase of 5%. 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. IdaCorp's current payout ratio is 9.51%, meaning it paid out 9.51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IDA expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $2.36 per share, with earnings expected to increase 4.38% 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. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 IDA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).