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NexPoint Residential Trust Inc. (NXRT) is a Top Dividend Stock Right Now: Should You Buy?
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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
NexPoint Residential Trust Inc. In Focus
Headquartered in Dallas, NexPoint Residential Trust Inc. (NXRT - Free Report) is a Finance stock that has seen a price change of -13.87% so far this year. The real estate investment trust is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.11%. This compares to the REIT and Equity Trust - Residential industry's yield of 2.91% and the S&P 500's yield of 1.6%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.3% from last year. NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.66%. 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, NexPoint Residential Trust Inc.'s payout ratio is 50%, which means it paid out 50% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NXRT expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.42 per share, representing a year-over-year earnings growth rate of 24.36%.
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. However, not all companies offer 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. With that in mind, NXRT 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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NexPoint Residential Trust Inc. (NXRT) is a Top Dividend Stock Right Now: Should You Buy?
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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
NexPoint Residential Trust Inc. In Focus
Headquartered in Dallas, NexPoint Residential Trust Inc. (NXRT - Free Report) is a Finance stock that has seen a price change of -13.87% so far this year. The real estate investment trust is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.11%. This compares to the REIT and Equity Trust - Residential industry's yield of 2.91% and the S&P 500's yield of 1.6%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.3% from last year. NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.66%. 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, NexPoint Residential Trust Inc.'s payout ratio is 50%, which means it paid out 50% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NXRT expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.42 per share, representing a year-over-year earnings growth rate of 24.36%.
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. However, not all companies offer 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. With that in mind, NXRT 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).