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Why The Hartford (HIG) is a Top Dividend Stock for Your Portfolio
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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. 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.
The Hartford in Focus
Based in Hartford, The Hartford (HIG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -8.81%. The insurance and financial services company is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.45% compared to the Insurance - Multi line industry's yield of 1.71% and the S&P 500's yield of 1.63%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.54 is up 7.3% from last year. Over the last 5 years, The Hartford has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.22%. 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. The Hartford's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
HIG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $7.15 per share, which represents a year-over-year growth rate of 16.26%.
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.
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, HIG presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Why The Hartford (HIG) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
The Hartford in Focus
Based in Hartford, The Hartford (HIG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -8.81%. The insurance and financial services company is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.45% compared to the Insurance - Multi line industry's yield of 1.71% and the S&P 500's yield of 1.63%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.54 is up 7.3% from last year. Over the last 5 years, The Hartford has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.22%. 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. The Hartford's current payout ratio is 22%, meaning it paid out 22% of its trailing 12-month EPS as dividend.
HIG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $7.15 per share, which represents a year-over-year growth rate of 16.26%.
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.
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, HIG presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).