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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 1.21% so far this year. The operator of utility, transportation and energy assets is paying out a dividend of $0.36 per share at the moment, with a dividend yield of 3.51% compared to the REIT and Equity Trust - Other industry's yield of 4.1% and the S&P 500's yield of 1.74%.
Looking at dividend growth, the company's current annualized dividend of $1.44 is up 5.9% from last year. Over the last 5 years, Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis for an average annual increase of 3.44%. 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. Brookfield Infrastructure's current payout ratio is 56%, meaning it paid out 56% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BIP expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.69 per share, which represents a year-over-year growth rate of 10.70%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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, BIP 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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Are You Looking for a High-Growth Dividend Stock?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 1.21% so far this year. The operator of utility, transportation and energy assets is paying out a dividend of $0.36 per share at the moment, with a dividend yield of 3.51% compared to the REIT and Equity Trust - Other industry's yield of 4.1% and the S&P 500's yield of 1.74%.
Looking at dividend growth, the company's current annualized dividend of $1.44 is up 5.9% from last year. Over the last 5 years, Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis for an average annual increase of 3.44%. 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. Brookfield Infrastructure's current payout ratio is 56%, meaning it paid out 56% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BIP expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.69 per share, which represents a year-over-year growth rate of 10.70%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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, BIP 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).