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Why NexPoint Residential Trust Inc. (NXRT) 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. 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.
NexPoint Residential Trust Inc. In Focus
Based in Dallas, NexPoint Residential Trust Inc. (NXRT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -18.56%. The real estate investment trust is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.23% compared to the REIT and Equity Trust - Residential industry's yield of 2.89% and the S&P 500's yield of 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 8.3% from last year. Over the last 5 years, NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis 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.
NXRT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.43 per share, representing a year-over-year earnings growth rate of 24.73%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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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Why NexPoint Residential Trust Inc. (NXRT) 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. 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.
NexPoint Residential Trust Inc. In Focus
Based in Dallas, NexPoint Residential Trust Inc. (NXRT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -18.56%. The real estate investment trust is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.23% compared to the REIT and Equity Trust - Residential industry's yield of 2.89% and the S&P 500's yield of 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 8.3% from last year. Over the last 5 years, NexPoint Residential Trust Inc. has increased its dividend 5 times on a year-over-year basis 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.
NXRT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.43 per share, representing a year-over-year earnings growth rate of 24.73%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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).