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Why Spartan Stores (SPTN) is a Great Dividend Stock Right Now
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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 when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Spartan Stores in Focus
Spartan Stores (SPTN - Free Report) is headquartered in Grand Rapids, and is in the Retail-Wholesale sector. The stock has seen a price change of 43.21% since the start of the year. The grocery store operator and grocery distributor is paying out a dividend of $0.21 per share at the moment, with a dividend yield of 2.28% compared to the Food - Natural Foods Products industry's yield of 1.16% and the S&P 500's yield of 1.68%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.84 is up 5% from last year. Over the last 5 years, Spartan Stores has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.98%. 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, Spartan Stores's payout ratio is 40%, which means it paid out 40% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SPTN for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.32 per share, which represents a year-over-year growth rate of 36.47%.
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. 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 SPTN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Spartan Stores (SPTN) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Spartan Stores in Focus
Spartan Stores (SPTN - Free Report) is headquartered in Grand Rapids, and is in the Retail-Wholesale sector. The stock has seen a price change of 43.21% since the start of the year. The grocery store operator and grocery distributor is paying out a dividend of $0.21 per share at the moment, with a dividend yield of 2.28% compared to the Food - Natural Foods Products industry's yield of 1.16% and the S&P 500's yield of 1.68%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.84 is up 5% from last year. Over the last 5 years, Spartan Stores has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.98%. 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, Spartan Stores's payout ratio is 40%, which means it paid out 40% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SPTN for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.32 per share, which represents a year-over-year growth rate of 36.47%.
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. 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 SPTN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).