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American Homes 4 Rent (AMH) is a Top Dividend Stock Right Now: Should You Buy?
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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Homes 4 Rent in Focus
Headquartered in Las Vegas, American Homes 4 Rent (AMH - Free Report) is a Finance stock that has seen a price change of 15.63% so far this year. The real estate company is currently shelling out a dividend of $0.22 per share, with a dividend yield of 2.53%. This compares to the REIT and Equity Trust - Residential industry's yield of 4.45% and the S&P 500's yield of 1.71%.
In terms of dividend growth, the company's current annualized dividend of $0.88 is up 22.2% from last year. In the past five-year period, American Homes 4 Rent has increased its dividend 3 times on a year-over-year basis for an average annual increase of 48.89%. 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. American Homes 4 Rent's current payout ratio is 55%. This means it paid out 55% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AMH expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $1.65 per share, with earnings expected to increase 7.14% from the year ago period.
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.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful 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 AMH 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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American Homes 4 Rent (AMH) is a Top Dividend Stock Right Now: Should You Buy?
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Homes 4 Rent in Focus
Headquartered in Las Vegas, American Homes 4 Rent (AMH - Free Report) is a Finance stock that has seen a price change of 15.63% so far this year. The real estate company is currently shelling out a dividend of $0.22 per share, with a dividend yield of 2.53%. This compares to the REIT and Equity Trust - Residential industry's yield of 4.45% and the S&P 500's yield of 1.71%.
In terms of dividend growth, the company's current annualized dividend of $0.88 is up 22.2% from last year. In the past five-year period, American Homes 4 Rent has increased its dividend 3 times on a year-over-year basis for an average annual increase of 48.89%. 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. American Homes 4 Rent's current payout ratio is 55%. This means it paid out 55% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AMH expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $1.65 per share, with earnings expected to increase 7.14% from the year ago period.
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.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful 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 AMH is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).