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This is Why Celanese (CE) is a Great Dividend Stock
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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 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.
Celanese in Focus
Based in Irving, Celanese (CE - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -4.74%. Currently paying a dividend of $0.54 per share, the company has a dividend yield of 2.12%. In comparison, the Chemical - Specialty industry's yield is 0.35%, while the S&P 500's yield is 1.83%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.16 is up 24.1% from last year. In the past five-year period, Celanese has increased its dividend 5 times on a year-over-year basis for an average annual increase of 24.08%. 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. Celanese's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
CE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $10.76 per share, representing a year-over-year earnings growth rate of 43.28%.
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. 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 CE 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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This is Why Celanese (CE) is a Great 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. 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 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.
Celanese in Focus
Based in Irving, Celanese (CE - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -4.74%. Currently paying a dividend of $0.54 per share, the company has a dividend yield of 2.12%. In comparison, the Chemical - Specialty industry's yield is 0.35%, while the S&P 500's yield is 1.83%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.16 is up 24.1% from last year. In the past five-year period, Celanese has increased its dividend 5 times on a year-over-year basis for an average annual increase of 24.08%. 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. Celanese's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
CE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $10.76 per share, representing a year-over-year earnings growth rate of 43.28%.
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. 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 CE is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).