We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
This is Why Timken (TKR) is a Great Dividend Stock
Read MoreHide Full Article
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Timken in Focus
Headquartered in North Canton, Timken (TKR - Free Report) is an Industrial Products stock that has seen a price change of 19.13% so far this year. The maker of bearings and power transmissions is currently shelling out a dividend of $0.28 per share, with a dividend yield of 2.52%. This compares to the Metal Products - Procurement and Fabrication industry's yield of 0.42% and the S&P 500's yield of 1.99%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 0.9% from last year. In the past five-year period, Timken has increased its dividend 3 times on a year-over-year basis for an average annual increase of 2.58%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Timken's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
TKR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $5.28 per share, representing a year-over-year earnings growth rate of 26.32%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TKR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
This is Why Timken (TKR) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Timken in Focus
Headquartered in North Canton, Timken (TKR - Free Report) is an Industrial Products stock that has seen a price change of 19.13% so far this year. The maker of bearings and power transmissions is currently shelling out a dividend of $0.28 per share, with a dividend yield of 2.52%. This compares to the Metal Products - Procurement and Fabrication industry's yield of 0.42% and the S&P 500's yield of 1.99%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 0.9% from last year. In the past five-year period, Timken has increased its dividend 3 times on a year-over-year basis for an average annual increase of 2.58%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Timken's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
TKR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $5.28 per share, representing a year-over-year earnings growth rate of 26.32%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TKR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).