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Are You Looking for a High-Growth Dividend Stock? Steelcase (SCS) Could Be a Great Choice
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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Steelcase in Focus
Steelcase (SCS - Free Report) is headquartered in Grand Rapids, and is in the Business Services sector. The stock has seen a price change of 18.81% since the start of the year. Currently paying a dividend of $0.14 per share, the company has a dividend yield of 3.29%. In comparison, the Business - Office Products industry's yield is 2.57%, while the S&P 500's yield is 1.87%.
Looking at dividend growth, the company's current annualized dividend of $0.58 is up 7.4% from last year. In the past five-year period, Steelcase has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.53%. 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. Steelcase's current payout ratio is 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
SCS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $1.35 per share, representing a year-over-year earnings growth rate of 12.50%.
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.
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. That said, they can take comfort from the fact that SCS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Are You Looking for a High-Growth Dividend Stock? Steelcase (SCS) Could Be a Great Choice
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Steelcase in Focus
Steelcase (SCS - Free Report) is headquartered in Grand Rapids, and is in the Business Services sector. The stock has seen a price change of 18.81% since the start of the year. Currently paying a dividend of $0.14 per share, the company has a dividend yield of 3.29%. In comparison, the Business - Office Products industry's yield is 2.57%, while the S&P 500's yield is 1.87%.
Looking at dividend growth, the company's current annualized dividend of $0.58 is up 7.4% from last year. In the past five-year period, Steelcase has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.53%. 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. Steelcase's current payout ratio is 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
SCS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $1.35 per share, representing a year-over-year earnings growth rate of 12.50%.
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.
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. That said, they can take comfort from the fact that SCS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).