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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Huntsman in Focus
Headquartered in The Woodlands, Huntsman (HUN - Free Report) is a Basic Materials stock that has seen a price change of -18.61% so far this year. The chemical company is currently shelling out a dividend of $0.21 per share, with a dividend yield of 2.99%. This compares to the Chemical - Diversified industry's yield of 1.8% and the S&P 500's yield of 1.76%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.85 is up 17.2% from last year. Over the last 5 years, Huntsman has increased its dividend 2 times on a year-over-year basis for an average annual increase of 7.78%. 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. Huntsman's current payout ratio is 21%. This means it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HUN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.48 per share, with earnings expected to increase 26.55% from the year ago period.
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. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HUN 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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Huntsman (HUN) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Huntsman in Focus
Headquartered in The Woodlands, Huntsman (HUN - Free Report) is a Basic Materials stock that has seen a price change of -18.61% so far this year. The chemical company is currently shelling out a dividend of $0.21 per share, with a dividend yield of 2.99%. This compares to the Chemical - Diversified industry's yield of 1.8% and the S&P 500's yield of 1.76%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.85 is up 17.2% from last year. Over the last 5 years, Huntsman has increased its dividend 2 times on a year-over-year basis for an average annual increase of 7.78%. 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. Huntsman's current payout ratio is 21%. This means it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HUN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.48 per share, with earnings expected to increase 26.55% from the year ago period.
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. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HUN 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).