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Kroger (KR) is a Top Dividend Stock Right Now: Should You Buy?
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Kroger in Focus
Headquartered in Cincinnati, Kroger (KR - Free Report) is a Retail-Wholesale stock that has seen a price change of 5.92% so far this year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 2.17%. In comparison, the Retail - Supermarkets industry's yield is 1.54%, while the S&P 500's yield is 1.69%.
In terms of dividend growth, the company's current annualized dividend of $1.04 is up 33.3% from last year. Kroger has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.15%. 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, Kroger's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, KR expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.92 per share, which represents a year-over-year growth rate of 6.52%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KR 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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Kroger (KR) is a Top Dividend Stock Right Now: Should You Buy?
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Kroger in Focus
Headquartered in Cincinnati, Kroger (KR - Free Report) is a Retail-Wholesale stock that has seen a price change of 5.92% so far this year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 2.17%. In comparison, the Retail - Supermarkets industry's yield is 1.54%, while the S&P 500's yield is 1.69%.
In terms of dividend growth, the company's current annualized dividend of $1.04 is up 33.3% from last year. Kroger has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.15%. 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, Kroger's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, KR expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.92 per share, which represents a year-over-year growth rate of 6.52%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, KR 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).