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Why Axis Capital (AXS) is a Great Dividend Stock Right Now
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
Axis Capital in Focus
Axis Capital (AXS - Free Report) is headquartered in Pembroke, and is in the Finance sector. The stock has seen a price change of 1.56% since the start of the year. The insurance company is currently shelling out a dividend of $0.43 per share, with a dividend yield of 3.11%. This compares to the Insurance - Property and Casualty industry's yield of 1.13% and the S&P 500's yield of 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. Over the last 5 years, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.44%. 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. Axis Capital's current payout ratio is 28%. This means it paid out 28% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AXS for this fiscal year. The Zacks Consensus Estimate for 2022 is $6.18 per share, representing a year-over-year earnings growth rate of 20.70%.
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. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful 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 AXS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Axis Capital (AXS) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
Axis Capital in Focus
Axis Capital (AXS - Free Report) is headquartered in Pembroke, and is in the Finance sector. The stock has seen a price change of 1.56% since the start of the year. The insurance company is currently shelling out a dividend of $0.43 per share, with a dividend yield of 3.11%. This compares to the Insurance - Property and Casualty industry's yield of 1.13% and the S&P 500's yield of 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. Over the last 5 years, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.44%. 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. Axis Capital's current payout ratio is 28%. This means it paid out 28% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AXS for this fiscal year. The Zacks Consensus Estimate for 2022 is $6.18 per share, representing a year-over-year earnings growth rate of 20.70%.
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. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful 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 AXS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).