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Essex Property Trust (ESS) 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. However, 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 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.
Essex Property Trust in Focus
Based in San Mateo, Essex Property Trust (ESS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.71%. The real estate investment trust is currently shelling out a dividend of $1.86 per share, with a dividend yield of 3%. This compares to the REIT and Equity Trust - Residential industry's yield of 3.52% and the S&P 500's yield of 2.02%.
Looking at dividend growth, the company's current annualized dividend of $7.44 is up 6.3% from last year. Essex Property Trust has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.09%. 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. Essex Property Trust's current payout ratio is 61%, meaning it paid out 61% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, ESS expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $12.58 per share, with earnings expected to increase 5.63% from the year ago period.
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.
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. With that in mind, ESS is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Essex Property Trust (ESS) 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. However, 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 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.
Essex Property Trust in Focus
Based in San Mateo, Essex Property Trust (ESS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 2.71%. The real estate investment trust is currently shelling out a dividend of $1.86 per share, with a dividend yield of 3%. This compares to the REIT and Equity Trust - Residential industry's yield of 3.52% and the S&P 500's yield of 2.02%.
Looking at dividend growth, the company's current annualized dividend of $7.44 is up 6.3% from last year. Essex Property Trust has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.09%. 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. Essex Property Trust's current payout ratio is 61%, meaning it paid out 61% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, ESS expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $12.58 per share, with earnings expected to increase 5.63% from the year ago period.
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.
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. With that in mind, ESS is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).