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This is Why American Assets Trust (AAT) is a Great Dividend Stock
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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. 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 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.
American Assets Trust in Focus
Based in San Diego, American Assets Trust (AAT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -15.56%. Currently paying a dividend of $0.32 per share, the company has a dividend yield of 4.04%. In comparison, the REIT and Equity Trust - Retail industry's yield is 3.92%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.28 is up 10.3% from last year. American Assets Trust has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.80%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, American Assets Trust's payout ratio is 58%, which means it paid out 58% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AAT for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.16 per share, which represents a year-over-year growth rate of 8%.
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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that AAT 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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This is Why American Assets Trust (AAT) 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. 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 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.
American Assets Trust in Focus
Based in San Diego, American Assets Trust (AAT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -15.56%. Currently paying a dividend of $0.32 per share, the company has a dividend yield of 4.04%. In comparison, the REIT and Equity Trust - Retail industry's yield is 3.92%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $1.28 is up 10.3% from last year. American Assets Trust has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.80%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, American Assets Trust's payout ratio is 58%, which means it paid out 58% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AAT for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.16 per share, which represents a year-over-year growth rate of 8%.
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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that AAT is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).