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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.
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.
CTO Realty in Focus
Headquartered in Winter Park, CTO Realty (CTO - Free Report) is a Finance stock that has seen a price change of 3.34% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 8.05%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.41%, while the S&P 500's yield is 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 1.8% from last year. Over the last 5 years, CTO Realty has increased its dividend 4 times on a year-over-year basis for an average annual increase of 117.11%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CTO Realty's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
CTO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.99 per share, representing a year-over-year earnings growth rate of 8.74%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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. 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, CTO 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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CTO Realty (CTO) Could Be a Great Choice
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.
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.
CTO Realty in Focus
Headquartered in Winter Park, CTO Realty (CTO - Free Report) is a Finance stock that has seen a price change of 3.34% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 8.05%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.41%, while the S&P 500's yield is 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 1.8% from last year. Over the last 5 years, CTO Realty has increased its dividend 4 times on a year-over-year basis for an average annual increase of 117.11%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CTO Realty's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
CTO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.99 per share, representing a year-over-year earnings growth rate of 8.74%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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. 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, CTO 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).