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.
MDU Resources in Focus
MDU Resources (MDU - Free Report) is headquartered in Bismarck, and is in the Utilities sector. The stock has seen a price change of 18.94% since the start of the year. Currently paying a dividend of $0.21 per share, the company has a dividend yield of 2.71%. In comparison, the Utility - Gas Distribution industry's yield is 2.92%, while the S&P 500's yield is 1.36%.
Looking at dividend growth, the company's current annualized dividend of $0.85 is up 1.8% from last year. In the past five-year period, MDU Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.41%. 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. MDU Resources's current payout ratio is 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MDU expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.13 per share, with earnings expected to increase 9.23% from the year ago period.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MDU is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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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.
MDU Resources in Focus
MDU Resources (MDU - Free Report) is headquartered in Bismarck, and is in the Utilities sector. The stock has seen a price change of 18.94% since the start of the year. Currently paying a dividend of $0.21 per share, the company has a dividend yield of 2.71%. In comparison, the Utility - Gas Distribution industry's yield is 2.92%, while the S&P 500's yield is 1.36%.
Looking at dividend growth, the company's current annualized dividend of $0.85 is up 1.8% from last year. In the past five-year period, MDU Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.41%. 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. MDU Resources's current payout ratio is 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MDU expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.13 per share, with earnings expected to increase 9.23% from the year ago period.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MDU is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
Buy 5 Stocks BEFORE Election Day
Biden or Trump? Zacks is releasing a FREE Special Report, Profit from the 2024 Presidential Election (no matter who wins).
Since 1950, presidential election years have been strong for the market. This report names 5 timely stocks to ride the wave of electoral excitement.
They include a medical manufacturer that gained +11,000% in the last 15 years… a rental company absolutely crushing its sector… an energy powerhouse planning to grow its already large dividend by 25%... an aerospace and defense standout that just landed a potentially $80 billion contract… and a giant chipmaker building huge plants in the U.S.
Don’t Wait. Download FREE >>
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