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Portland General Electric (POR) is a Top Dividend Stock Right Now: Should You Buy?
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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Portland General Electric in Focus
Portland General Electric (POR - Free Report) is headquartered in Portland, and is in the Utilities sector. The stock has seen a price change of 16.67% since the start of the year. The electric utility is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.45% compared to the Utility - Electric Power industry's yield of 3.2% and the S&P 500's yield of 1.38%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 8.5% from last year. Over the last 5 years, Portland General Electric has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.05%. 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. Portland General Electric's current payout ratio is 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.
POR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.71 per share, which represents a year-over-year growth rate of 57.56%.
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. That said, they can take comfort from the fact that POR is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Portland General Electric (POR) is a Top Dividend Stock Right Now: Should You Buy?
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Portland General Electric in Focus
Portland General Electric (POR - Free Report) is headquartered in Portland, and is in the Utilities sector. The stock has seen a price change of 16.67% since the start of the year. The electric utility is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.45% compared to the Utility - Electric Power industry's yield of 3.2% and the S&P 500's yield of 1.38%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 8.5% from last year. Over the last 5 years, Portland General Electric has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.05%. 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. Portland General Electric's current payout ratio is 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.
POR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.71 per share, which represents a year-over-year growth rate of 57.56%.
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. That said, they can take comfort from the fact that POR is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).