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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Axis Capital in Focus
Headquartered in Pembroke, Axis Capital (AXS - Free Report) is a Finance stock that has seen a price change of 11.83% so far this year. The insurance company is currently shelling out a dividend of $0.44 per share, with a dividend yield of 2.91%. This compares to the Insurance - Property and Casualty industry's yield of 0.7% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.76 is up 1.7% from last year. Over the last 5 years, Axis Capital has increased its dividend 4 times on a year-over-year basis for an average annual increase of 2.39%. 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, Axis Capital's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AXS expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $7.53 per share, which represents a year-over-year growth rate of 29.60%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that AXS is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Axis Capital (AXS) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Axis Capital in Focus
Headquartered in Pembroke, Axis Capital (AXS - Free Report) is a Finance stock that has seen a price change of 11.83% so far this year. The insurance company is currently shelling out a dividend of $0.44 per share, with a dividend yield of 2.91%. This compares to the Insurance - Property and Casualty industry's yield of 0.7% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.76 is up 1.7% from last year. Over the last 5 years, Axis Capital has increased its dividend 4 times on a year-over-year basis for an average annual increase of 2.39%. 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, Axis Capital's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AXS expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $7.53 per share, which represents a year-over-year growth rate of 29.60%.
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. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that AXS is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).