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Are You Looking for a High-Growth Dividend Stock? Thor Industries (THO) Could Be a Great Choice
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Thor Industries in Focus
Thor Industries (THO - Free Report) is headquartered in Elkhart, and is in the Construction sector. The stock has seen a price change of 8.08% since the start of the year. The recreational vehicle maker is currently shelling out a dividend of $0.41 per share, with a dividend yield of 2.04%. This compares to the Building Products - Mobile Homes and RV Builders industry's yield of 0.47% and the S&P 500's yield of 1.51%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.64 is up 2.5% from last year. Over the last 5 years, Thor Industries has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.41%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Thor Industries's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, THO expects solid earnings growth. The Zacks Consensus Estimate for 2020 is $6.57 per share, with earnings expected to increase 38.61% 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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 THO is not only an attractive dividend play, but also represents 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? Thor Industries (THO) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Thor Industries in Focus
Thor Industries (THO - Free Report) is headquartered in Elkhart, and is in the Construction sector. The stock has seen a price change of 8.08% since the start of the year. The recreational vehicle maker is currently shelling out a dividend of $0.41 per share, with a dividend yield of 2.04%. This compares to the Building Products - Mobile Homes and RV Builders industry's yield of 0.47% and the S&P 500's yield of 1.51%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.64 is up 2.5% from last year. Over the last 5 years, Thor Industries has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.41%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Thor Industries's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, THO expects solid earnings growth. The Zacks Consensus Estimate for 2020 is $6.57 per share, with earnings expected to increase 38.61% 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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 THO is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).