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North American Construction (NOA) is a Top Dividend Stock Right Now: Should You Buy?
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
North American Construction in Focus
Based in Acheson, North American Construction (NOA - Free Report) is in the Construction sector, and so far this year, shares have seen a price change of -24.83%. The heavy construction and mining services company is paying out a dividend of $0.06 per share at the moment, with a dividend yield of 2.19% compared to the Building Products - Heavy Construction industry's yield of 0.49% and the S&P 500's yield of 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.25 is up 95.3% from last year. North American Construction has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 42.42%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, North American Construction's payout ratio is 16%, which means it paid out 16% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NOA for this fiscal year. The Zacks Consensus Estimate for 2022 is $1.83 per share, representing a year-over-year earnings growth rate of 11.59%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NOA 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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North American Construction (NOA) is a Top Dividend Stock Right Now: Should You Buy?
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
North American Construction in Focus
Based in Acheson, North American Construction (NOA - Free Report) is in the Construction sector, and so far this year, shares have seen a price change of -24.83%. The heavy construction and mining services company is paying out a dividend of $0.06 per share at the moment, with a dividend yield of 2.19% compared to the Building Products - Heavy Construction industry's yield of 0.49% and the S&P 500's yield of 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.25 is up 95.3% from last year. North American Construction has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 42.42%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, North American Construction's payout ratio is 16%, which means it paid out 16% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for NOA for this fiscal year. The Zacks Consensus Estimate for 2022 is $1.83 per share, representing a year-over-year earnings growth rate of 11.59%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NOA 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).