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Radian (RDN) is a Top Dividend Stock Right Now: Should You Buy?
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Radian in Focus
Radian (RDN - Free Report) is headquartered in Philadelphia, and is in the Finance sector. The stock has seen a price change of 7.7% since the start of the year. Currently paying a dividend of $0.14 per share, the company has a dividend yield of 2.57%. In comparison, the Insurance - Multi line industry's yield is 1.7%, while the S&P 500's yield is 1.33%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.56 is up 12% from last year. In the past five-year period, Radian has increased its dividend 2 times on a year-over-year basis for an average annual increase of 170.41%. 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. Radian's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
RDN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.73 per share, which represents a year-over-year growth rate of 56.90%.
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. With that in mind, RDN 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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Radian (RDN) is a Top Dividend Stock Right Now: Should You Buy?
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Radian in Focus
Radian (RDN - Free Report) is headquartered in Philadelphia, and is in the Finance sector. The stock has seen a price change of 7.7% since the start of the year. Currently paying a dividend of $0.14 per share, the company has a dividend yield of 2.57%. In comparison, the Insurance - Multi line industry's yield is 1.7%, while the S&P 500's yield is 1.33%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.56 is up 12% from last year. In the past five-year period, Radian has increased its dividend 2 times on a year-over-year basis for an average annual increase of 170.41%. 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. Radian's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
RDN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.73 per share, which represents a year-over-year growth rate of 56.90%.
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. With that in mind, RDN 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).