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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Gatx in Focus
Gatx (GATX - Free Report) is headquartered in Chicago, and is in the Transportation sector. The stock has seen a price change of -4.22% since the start of the year. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.08%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.28%, while the S&P 500's yield is 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.08 is up 4% from last year. Gatx has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.46%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Gatx's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GATX for this fiscal year. The Zacks Consensus Estimate for 2022 is $5.95 per share, with earnings expected to increase 17.59% 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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that GATX is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Gatx (GATX) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Gatx in Focus
Gatx (GATX - Free Report) is headquartered in Chicago, and is in the Transportation sector. The stock has seen a price change of -4.22% since the start of the year. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.08%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.28%, while the S&P 500's yield is 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.08 is up 4% from last year. Gatx has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.46%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Gatx's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GATX for this fiscal year. The Zacks Consensus Estimate for 2022 is $5.95 per share, with earnings expected to increase 17.59% 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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that GATX is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).