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Gatx (GATX) is a Top Dividend Stock Right Now: Should You Buy?
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Gatx in Focus
Headquartered in Chicago, Gatx (GATX - Free Report) is a Transportation stock that has seen a price change of -12.86% so far this year. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.29%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.39%, while the S&P 500's yield is 1.83%.
In terms of dividend growth, the company's current annualized dividend of $2.08 is up 4% from last year. In the past five-year period, Gatx has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.46%. 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, Gatx's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GATX expects solid earnings growth. 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 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, GATX 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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Gatx (GATX) is a Top Dividend Stock Right Now: Should You Buy?
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Gatx in Focus
Headquartered in Chicago, Gatx (GATX - Free Report) is a Transportation stock that has seen a price change of -12.86% so far this year. Currently paying a dividend of $0.52 per share, the company has a dividend yield of 2.29%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.39%, while the S&P 500's yield is 1.83%.
In terms of dividend growth, the company's current annualized dividend of $2.08 is up 4% from last year. In the past five-year period, Gatx has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.46%. 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, Gatx's payout ratio is 34%, which means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GATX expects solid earnings growth. 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 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, GATX 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).