All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
Atlantic Union in Focus
Headquartered in Glen Allen, Atlantic Union (AUB - Free Report) is a Finance stock that has seen a price change of -9.69% so far this year. Currently paying a dividend of $0.32 per share, the company has a dividend yield of 3.88%. In comparison, the Banks - Northeast industry's yield is 2.98%, while the S&P 500's yield is 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.28 is up 4.9% from last year. In the past five-year period, Atlantic Union has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.60%. 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. Atlantic Union's current payout ratio is 43%, meaning it paid out 43% of its trailing 12-month EPS as dividend.
AUB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.20 per share, with earnings expected to increase 8.47% from the year ago period.
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. 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, AUB 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 >>
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
Atlantic Union in Focus
Headquartered in Glen Allen, Atlantic Union (AUB - Free Report) is a Finance stock that has seen a price change of -9.69% so far this year. Currently paying a dividend of $0.32 per share, the company has a dividend yield of 3.88%. In comparison, the Banks - Northeast industry's yield is 2.98%, while the S&P 500's yield is 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.28 is up 4.9% from last year. In the past five-year period, Atlantic Union has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.60%. 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. Atlantic Union's current payout ratio is 43%, meaning it paid out 43% of its trailing 12-month EPS as dividend.
AUB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.20 per share, with earnings expected to increase 8.47% from the year ago period.
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. 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, AUB 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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