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Why M.D.C. Holdings, Inc. (MDC) is a Top Dividend Stock for Your Portfolio
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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. But 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.
M.D.C. Holdings, Inc. In Focus
Based in Denver, M.D.C. Holdings, Inc. (MDC - Free Report) is in the Construction sector, and so far this year, shares have seen a price change of 13.47%. The company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 3.13%. This compares to the Building Products - Home Builders industry's yield of 0.42% and the S&P 500's yield of 1.36%.
In terms of dividend growth, the company's current annualized dividend of $1.60 is up 24.3% from last year. Over the last 5 years, M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 15.77%. 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. M.D.C. Holdings, Inc.'s current payout ratio is 23%, meaning it paid out 23% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MDC for this fiscal year. The Zacks Consensus Estimate for 2021 is $8.56 per share, which represents a year-over-year growth rate of 65.57%.
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.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MDC 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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Why M.D.C. Holdings, Inc. (MDC) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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.
M.D.C. Holdings, Inc. In Focus
Based in Denver, M.D.C. Holdings, Inc. (MDC - Free Report) is in the Construction sector, and so far this year, shares have seen a price change of 13.47%. The company is currently shelling out a dividend of $0.4 per share, with a dividend yield of 3.13%. This compares to the Building Products - Home Builders industry's yield of 0.42% and the S&P 500's yield of 1.36%.
In terms of dividend growth, the company's current annualized dividend of $1.60 is up 24.3% from last year. Over the last 5 years, M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 15.77%. 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. M.D.C. Holdings, Inc.'s current payout ratio is 23%, meaning it paid out 23% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MDC for this fiscal year. The Zacks Consensus Estimate for 2021 is $8.56 per share, which represents a year-over-year growth rate of 65.57%.
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.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MDC 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).