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Why Greif (GEF) is a Great Dividend Stock Right Now
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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.
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.
Greif in Focus
Headquartered in Delaware, Greif (GEF - Free Report) is an Industrial Products stock that has seen a price change of 6.76% so far this year. The industrial packaging company is currently shelling out a dividend of $0.44 per share, with a dividend yield of 4.44%. This compares to the Containers - Paper and Packaging industry's yield of 2.2% and the S&P 500's yield of 1.89%.
Looking at dividend growth, the company's current annualized dividend of $1.76 is up 3.5% from last year. Greif has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 0.27%. 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. Greif's current payout ratio is 48%, meaning it paid out 48% of its trailing 12-month EPS as dividend.
GEF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $3.67 per share, with earnings expected to increase 3.97% 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. However, not all companies offer 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. With that in mind, GEF 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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Why Greif (GEF) is a Great Dividend Stock Right Now
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.
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.
Greif in Focus
Headquartered in Delaware, Greif (GEF - Free Report) is an Industrial Products stock that has seen a price change of 6.76% so far this year. The industrial packaging company is currently shelling out a dividend of $0.44 per share, with a dividend yield of 4.44%. This compares to the Containers - Paper and Packaging industry's yield of 2.2% and the S&P 500's yield of 1.89%.
Looking at dividend growth, the company's current annualized dividend of $1.76 is up 3.5% from last year. Greif has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 0.27%. 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. Greif's current payout ratio is 48%, meaning it paid out 48% of its trailing 12-month EPS as dividend.
GEF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $3.67 per share, with earnings expected to increase 3.97% 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. However, not all companies offer 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. With that in mind, GEF 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).