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Are You Looking for a High-Growth Dividend Stock? MDU Resources (MDU) Could Be a Great Choice
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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.
MDU Resources in Focus
MDU Resources (MDU - Free Report) is headquartered in Bismarck, and is in the Utilities sector. The stock has seen a price change of 17.08% since the start of the year. The energy, mining, construction and utilities company is paying out a dividend of $0.21 per share at the moment, with a dividend yield of 2.76% compared to the Utility - Gas Distribution industry's yield of 3% and the S&P 500's yield of 1.4%.
Looking at dividend growth, the company's current annualized dividend of $0.85 is up 1.8% from last year. In the past five-year period, MDU Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.41%. 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. MDU Resources's current payout ratio is 41%. This means it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MDU expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.13 per share, with earnings expected to increase 9.23% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 MDU 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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Are You Looking for a High-Growth Dividend Stock? MDU Resources (MDU) Could Be a Great Choice
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.
MDU Resources in Focus
MDU Resources (MDU - Free Report) is headquartered in Bismarck, and is in the Utilities sector. The stock has seen a price change of 17.08% since the start of the year. The energy, mining, construction and utilities company is paying out a dividend of $0.21 per share at the moment, with a dividend yield of 2.76% compared to the Utility - Gas Distribution industry's yield of 3% and the S&P 500's yield of 1.4%.
Looking at dividend growth, the company's current annualized dividend of $0.85 is up 1.8% from last year. In the past five-year period, MDU Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.41%. 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. MDU Resources's current payout ratio is 41%. This means it paid out 41% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MDU expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $2.13 per share, with earnings expected to increase 9.23% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 MDU is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).