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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 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.
Spire in Focus
Based in St Louis, Spire (SR - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 15.01%. Currently paying a dividend of $0.65 per share, the company has a dividend yield of 3.53%. In comparison, the Utility - Gas Distribution industry's yield is 3.04%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $2.60 is up 4.4% from last year. Spire has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.67%. 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. Spire's current payout ratio is 54%. This means it paid out 54% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $4.41 per share, representing a year-over-year earnings growth rate of 17.29%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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This is Why Spire (SR) is a Great Dividend Stock
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.
Spire in Focus
Based in St Louis, Spire (SR - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 15.01%. Currently paying a dividend of $0.65 per share, the company has a dividend yield of 3.53%. In comparison, the Utility - Gas Distribution industry's yield is 3.04%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $2.60 is up 4.4% from last year. Spire has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 5.67%. 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. Spire's current payout ratio is 54%. This means it paid out 54% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $4.41 per share, representing a year-over-year earnings growth rate of 17.29%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).