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Tronox (TROX) is a Top Dividend Stock Right Now: Should You Buy?
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Tronox in Focus
Based in Grimsby, Tronox (TROX - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -30.09%. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 2.98%. In comparison, the Chemical - Diversified industry's yield is 1.95%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 23.20%. 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, Tronox's payout ratio is 20%, which means it paid out 20% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.16 per share, with earnings expected to increase 37.99% from the year ago period.
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.
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. 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, TROX 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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Tronox (TROX) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Tronox in Focus
Based in Grimsby, Tronox (TROX - Free Report) is in the Basic Materials sector, and so far this year, shares have seen a price change of -30.09%. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 2.98%. In comparison, the Chemical - Diversified industry's yield is 1.95%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 23.20%. 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, Tronox's payout ratio is 20%, which means it paid out 20% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.16 per share, with earnings expected to increase 37.99% from the year ago period.
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.
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. 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, TROX 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).