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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.
Genuine Parts in Focus
Genuine Parts (GPC - Free Report) is headquartered in Atlanta, and is in the Auto-Tires-Trucks sector. The stock has seen a price change of -13.43% since the start of the year. The auto and industrial parts distributor is currently shelling out a dividend of $0.95 per share, with a dividend yield of 2.53%. This compares to the Automotive - Replacement Parts industry's yield of 1.1% and the S&P 500's yield of 1.7%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 6.1% from last year. In the past five-year period, Genuine Parts has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.69%. 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. Right now, Genuine Parts's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
GPC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $9.25 per share, with earnings expected to increase 10.91% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that GPC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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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 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.
Genuine Parts in Focus
Genuine Parts (GPC - Free Report) is headquartered in Atlanta, and is in the Auto-Tires-Trucks sector. The stock has seen a price change of -13.43% since the start of the year. The auto and industrial parts distributor is currently shelling out a dividend of $0.95 per share, with a dividend yield of 2.53%. This compares to the Automotive - Replacement Parts industry's yield of 1.1% and the S&P 500's yield of 1.7%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 6.1% from last year. In the past five-year period, Genuine Parts has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.69%. 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. Right now, Genuine Parts's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
GPC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $9.25 per share, with earnings expected to increase 10.91% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that GPC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).