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Are You Looking for a High-Growth Dividend Stock? Eastman Chemical (EMN) Could Be a Great Choice
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 12.39% so far this year. The specialty chemicals maker is paying out a dividend of $1.38 per share at the moment, with a dividend yield of 2.45% compared to the Chemical - Diversified industry's yield of 1.37% and the S&P 500's yield of 1.38%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.76 is up 3.4% from last year. In the past five-year period, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.24%. 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. Eastman Chemical's current payout ratio is 45%. This means it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for EMN for this fiscal year. The Zacks Consensus Estimate for 2021 is $7.87 per share, which represents a year-over-year growth rate of 27.97%.
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.
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. With that in mind, EMN 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).
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Are You Looking for a High-Growth Dividend Stock? Eastman Chemical (EMN) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 12.39% so far this year. The specialty chemicals maker is paying out a dividend of $1.38 per share at the moment, with a dividend yield of 2.45% compared to the Chemical - Diversified industry's yield of 1.37% and the S&P 500's yield of 1.38%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.76 is up 3.4% from last year. In the past five-year period, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.24%. 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. Eastman Chemical's current payout ratio is 45%. This means it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for EMN for this fiscal year. The Zacks Consensus Estimate for 2021 is $7.87 per share, which represents a year-over-year growth rate of 27.97%.
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.
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. With that in mind, EMN 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).