Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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 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.
NexPoint Residential Trust Inc. In Focus
NexPoint Residential Trust Inc. (NXRT - Free Report) is headquartered in Dallas, and is in the Finance sector. The stock has seen a price change of -25.39% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.43%. In comparison, the REIT and Equity Trust - Residential industry's yield is 3.05%, while the S&P 500's yield is 1.72%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 8.3% from last year. NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.66%. 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. NexPoint Residential Trust Inc.'s current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
NXRT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.38 per share, which represents a year-over-year growth rate of 22.91%.
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. However, not all companies offer 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. With that in mind, NXRT 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).
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But 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 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.
NexPoint Residential Trust Inc. In Focus
NexPoint Residential Trust Inc. (NXRT - Free Report) is headquartered in Dallas, and is in the Finance sector. The stock has seen a price change of -25.39% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.43%. In comparison, the REIT and Equity Trust - Residential industry's yield is 3.05%, while the S&P 500's yield is 1.72%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 8.3% from last year. NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.66%. 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. NexPoint Residential Trust Inc.'s current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
NXRT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.38 per share, which represents a year-over-year growth rate of 22.91%.
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. However, not all companies offer 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. With that in mind, NXRT 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).
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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