We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
This is Why Radian (RDN) is a Great Dividend Stock
Read MoreHide Full Article
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.
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.
Radian in Focus
Headquartered in Philadelphia, Radian (RDN - Free Report) is a Finance stock that has seen a price change of 15.16% so far this year. The mortgage insurer is currently shelling out a dividend of $0.14 per share, with a dividend yield of 2.4%. This compares to the Insurance - Multi line industry's yield of 1.77% and the S&P 500's yield of 1.4%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 12% from last year. In the past five-year period, Radian has increased its dividend 2 times on a year-over-year basis for an average annual increase of 195.33%. 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. Right now, Radian's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
RDN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.84 per share, which represents a year-over-year growth rate of 63.22%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that RDN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
This is Why Radian (RDN) is a Great Dividend Stock
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.
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.
Radian in Focus
Headquartered in Philadelphia, Radian (RDN - Free Report) is a Finance stock that has seen a price change of 15.16% so far this year. The mortgage insurer is currently shelling out a dividend of $0.14 per share, with a dividend yield of 2.4%. This compares to the Insurance - Multi line industry's yield of 1.77% and the S&P 500's yield of 1.4%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 12% from last year. In the past five-year period, Radian has increased its dividend 2 times on a year-over-year basis for an average annual increase of 195.33%. 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. Right now, Radian's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
RDN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.84 per share, which represents a year-over-year growth rate of 63.22%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that RDN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).