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Why Gatx (GATX) is a Top Dividend Stock for Your Portfolio
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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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -13.17% since the start of the year. The equipment finance company is currently shelling out a dividend of $0.52 per share, with a dividend yield of 2.3%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.38% and the S&P 500's yield of 1.8%.
Looking at dividend growth, the company's 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 4.35%. 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. Gatx's current payout ratio is 34%, meaning 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
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, GATX 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 Gatx (GATX) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -13.17% since the start of the year. The equipment finance company is currently shelling out a dividend of $0.52 per share, with a dividend yield of 2.3%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.38% and the S&P 500's yield of 1.8%.
Looking at dividend growth, the company's 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 4.35%. 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. Gatx's current payout ratio is 34%, meaning 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
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, GATX 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).