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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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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 2.21% so far this year. The specialty chemicals maker is currently shelling out a dividend of $0.69 per share, with a dividend yield of 2.69%. This compares to the Chemical - Diversified industry's yield of 1.58% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $2.76 is up 3.4% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.46%. 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. Eastman Chemical's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMN expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $9.20 per share, which represents a year-over-year growth rate of 49.59%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, 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
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 2.21% so far this year. The specialty chemicals maker is currently shelling out a dividend of $0.69 per share, with a dividend yield of 2.69%. This compares to the Chemical - Diversified industry's yield of 1.58% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $2.76 is up 3.4% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.46%. 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. Eastman Chemical's current payout ratio is 35%, meaning it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMN expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $9.20 per share, which represents a year-over-year growth rate of 49.59%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, 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).