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Are You Looking for a High-Growth Dividend Stock? Tronox (TROX) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -15.48% so far this year. The producer of titanium ore and titanium dioxide is paying out a dividend of $0.13 per share at the moment, with a dividend yield of 2.46% compared to the Chemical - Diversified industry's yield of 1.52% and the S&P 500's yield of 1.44%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. In the past five-year period, Tronox has increased its dividend 2 times on a year-over-year basis for an average annual increase of 19.41%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Tronox's payout ratio is 17%, which means it paid out 17% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.12 per share, which represents a year-over-year growth rate of 36.24%.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TROX presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Tronox (TROX) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -15.48% so far this year. The producer of titanium ore and titanium dioxide is paying out a dividend of $0.13 per share at the moment, with a dividend yield of 2.46% compared to the Chemical - Diversified industry's yield of 1.52% and the S&P 500's yield of 1.44%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. In the past five-year period, Tronox has increased its dividend 2 times on a year-over-year basis for an average annual increase of 19.41%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Tronox's payout ratio is 17%, which means it paid out 17% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.12 per share, which represents a year-over-year growth rate of 36.24%.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TROX presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).