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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 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 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.
Federated Hermes in Focus
Based in Pittsburgh, Federated Hermes (FHI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.77%. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.11%. In comparison, the Financial - Investment Management industry's yield is 2.69%, while the S&P 500's yield is 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Over the last 5 years, Federated Hermes has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.21%. 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. Federated Hermes's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FHI for this fiscal year. The Zacks Consensus Estimate for 2023 is $3.27 per share, representing a year-over-year earnings growth rate of 8.28%.
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.
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. With that in mind, FHI 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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Are You Looking for a High-Growth Dividend Stock?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Federated Hermes in Focus
Based in Pittsburgh, Federated Hermes (FHI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.77%. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.11%. In comparison, the Financial - Investment Management industry's yield is 2.69%, while the S&P 500's yield is 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Over the last 5 years, Federated Hermes has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.21%. 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. Federated Hermes's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FHI for this fiscal year. The Zacks Consensus Estimate for 2023 is $3.27 per share, representing a year-over-year earnings growth rate of 8.28%.
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.
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. With that in mind, FHI 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).