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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
Based in Grimsby, Tronox (TROX - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -30.84%. The producer of titanium ore and titanium dioxide is currently shelling out a dividend of $0.13 per share, with a dividend yield of 3.01%. This compares to the Chemical - Diversified industry's yield of 1.84% and the S&P 500's yield of 1.56%.
Looking at 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 3 times on a year-over-year basis for an average annual increase of 23.20%. 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. Tronox's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for TROX for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.14 per share, with earnings expected to increase 37.12% 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TROX 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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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
Based in Grimsby, Tronox (TROX - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -30.84%. The producer of titanium ore and titanium dioxide is currently shelling out a dividend of $0.13 per share, with a dividend yield of 3.01%. This compares to the Chemical - Diversified industry's yield of 1.84% and the S&P 500's yield of 1.56%.
Looking at 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 3 times on a year-over-year basis for an average annual increase of 23.20%. 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. Tronox's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for TROX for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.14 per share, with earnings expected to increase 37.12% 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, TROX 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).