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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Gatx in Focus
Headquartered in Chicago, Gatx (GATX - Free Report) is a Transportation stock that has seen a price change of 0.24% so far this year. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 2.06%. In comparison, the Transportation - Equipment and Leasing industry's yield is 2.02%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $2.20 is up 5.8% from last year. Over the last 5 years, Gatx has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.46%. 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. Gatx's current payout ratio is 33%. This means it paid out 33% of its trailing 12-month EPS as dividend.
GATX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $6.94 per share, which represents a year-over-year growth rate of 14.33%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GATX 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).
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Gatx in Focus
Headquartered in Chicago, Gatx (GATX - Free Report) is a Transportation stock that has seen a price change of 0.24% so far this year. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 2.06%. In comparison, the Transportation - Equipment and Leasing industry's yield is 2.02%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $2.20 is up 5.8% from last year. Over the last 5 years, Gatx has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.46%. 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. Gatx's current payout ratio is 33%. This means it paid out 33% of its trailing 12-month EPS as dividend.
GATX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $6.94 per share, which represents a year-over-year growth rate of 14.33%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GATX 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).
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on GATX - FREE