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Why Axis Capital (AXS) 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. 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 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.
Axis Capital in Focus
Axis Capital (AXS - Free Report) is headquartered in Pembroke, and is in the Finance sector. The stock has seen a price change of -2.11% since the start of the year. The insurance company is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.23% compared to the Insurance - Property and Casualty industry's yield of 1.07% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. In the past five-year period, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.40%. 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. Axis Capital's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
AXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $6.39 per share, with earnings expected to increase 24.80% 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. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AXS 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 Axis Capital (AXS) 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. 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 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.
Axis Capital in Focus
Axis Capital (AXS - Free Report) is headquartered in Pembroke, and is in the Finance sector. The stock has seen a price change of -2.11% since the start of the year. The insurance company is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.23% compared to the Insurance - Property and Casualty industry's yield of 1.07% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. In the past five-year period, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.40%. 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. Axis Capital's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
AXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $6.39 per share, with earnings expected to increase 24.80% 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. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AXS 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).