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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Astrazeneca in Focus
Astrazeneca (AZN - Free Report) is headquartered in Cambridge, and is in the Medical sector. The stock has seen a price change of -4% since the start of the year. The pharmaceutical is currently shelling out a dividend of $0.96 per share, with a dividend yield of 2.97%. This compares to the Large Cap Pharmaceuticals industry's yield of 2.69% and the S&P 500's yield of 1.77%.
In terms of dividend growth, the company's current annualized dividend of $1.93 is up 35.9% from last year. Astrazeneca has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 2.17%. 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. Astrazeneca's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AZN expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.61 per share, with earnings expected to increase 8.41% 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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, AZN 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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Astrazeneca (AZN) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Astrazeneca in Focus
Astrazeneca (AZN - Free Report) is headquartered in Cambridge, and is in the Medical sector. The stock has seen a price change of -4% since the start of the year. The pharmaceutical is currently shelling out a dividend of $0.96 per share, with a dividend yield of 2.97%. This compares to the Large Cap Pharmaceuticals industry's yield of 2.69% and the S&P 500's yield of 1.77%.
In terms of dividend growth, the company's current annualized dividend of $1.93 is up 35.9% from last year. Astrazeneca has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 2.17%. 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. Astrazeneca's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AZN expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.61 per share, with earnings expected to increase 8.41% 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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, AZN 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).