All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Herman Miller in Focus
Based in Zeeland, Herman Miller is in the Business Services sector, and so far this year, shares have seen a price change of -1.5%. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 2%. In comparison, the Business - Office Products industry's yield is 2.36%, while the S&P 500's yield is 1.77%.
Looking at dividend growth, the company's current annualized dividend of $0.79 is up 9.7% from last year. Over the last 5 years, Herman Miller has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8.26%. 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, Herman Miller's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MLHR expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $2.80 per share, which represents a year-over-year growth rate of 21.74%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that MLHR 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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Is Herman Miller (MLHR) a Great Dividend Play?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Herman Miller in Focus
Based in Zeeland, Herman Miller is in the Business Services sector, and so far this year, shares have seen a price change of -1.5%. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 2%. In comparison, the Business - Office Products industry's yield is 2.36%, while the S&P 500's yield is 1.77%.
Looking at dividend growth, the company's current annualized dividend of $0.79 is up 9.7% from last year. Over the last 5 years, Herman Miller has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8.26%. 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, Herman Miller's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MLHR expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $2.80 per share, which represents a year-over-year growth rate of 21.74%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. That said, they can take comfort from the fact that MLHR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).