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Why Tronox (TROX) is a Top Dividend Stock for Your Portfolio
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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.
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.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -22.51% so far this year. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 2.69%. In comparison, the Chemical - Diversified industry's yield is 1.5%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 23.20%. 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. Tronox's current payout ratio is 17%, meaning it paid out 17% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TROX expects solid earnings growth. 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 many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. 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 TROX 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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Why Tronox (TROX) is a Top Dividend Stock for Your Portfolio
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.
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.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -22.51% so far this year. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 2.69%. In comparison, the Chemical - Diversified industry's yield is 1.5%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 23.20%. 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. Tronox's current payout ratio is 17%, meaning it paid out 17% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, TROX expects solid earnings growth. 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 many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. 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 TROX is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).