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.
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.
South Jersey Industries in Focus
Based in Folsom, South Jersey Industries is in the Utilities sector, and so far this year, shares have seen a price change of 15.69%. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.1%. In comparison, the Utility - Gas Distribution industry's yield is 2.58%, while the S&P 500's yield is 1.83%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 2% from last year. In the past five-year period, South Jersey Industries has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.63%. 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. South Jersey Industries's current payout ratio is 63%, meaning it paid out 63% of its trailing 12-month EPS as dividend.
SJI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $1.60 per share, representing a year-over-year earnings growth rate of 30.08%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that SJI 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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South Jersey Industries (SJI) is a Top Dividend Stock Right Now: Should You Buy?
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.
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.
South Jersey Industries in Focus
Based in Folsom, South Jersey Industries is in the Utilities sector, and so far this year, shares have seen a price change of 15.69%. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.1%. In comparison, the Utility - Gas Distribution industry's yield is 2.58%, while the S&P 500's yield is 1.83%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 2% from last year. In the past five-year period, South Jersey Industries has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.63%. 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. South Jersey Industries's current payout ratio is 63%, meaning it paid out 63% of its trailing 12-month EPS as dividend.
SJI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $1.60 per share, representing a year-over-year earnings growth rate of 30.08%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that SJI is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).