All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -24.42%. The furniture maker is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.61%. This compares to the Business - Office Products industry's yield of 3.11% and the S&P 500's yield of 2.12%.
Looking at dividend growth, the company's current annualized dividend of $0.79 is up 9.7% from last year. Herman Miller has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 8.46%. 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. Herman Miller's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MLHR for this fiscal year. The Zacks Consensus Estimate for 2018 is $2.70 per share, with earnings expected to increase 17.39% 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. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MLHR 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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This is Why Herman Miller (MLHR) is a Great Dividend Stock
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -24.42%. The furniture maker is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.61%. This compares to the Business - Office Products industry's yield of 3.11% and the S&P 500's yield of 2.12%.
Looking at dividend growth, the company's current annualized dividend of $0.79 is up 9.7% from last year. Herman Miller has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 8.46%. 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. Herman Miller's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MLHR for this fiscal year. The Zacks Consensus Estimate for 2018 is $2.70 per share, with earnings expected to increase 17.39% 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. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MLHR 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).