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Why Greenbrier Companies (GBX) is a Top Dividend Stock for Your Portfolio
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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
Greenbrier Companies in Focus
Greenbrier Companies (GBX - Free Report) is headquartered in Lake Oswego, and is in the Transportation sector. The stock has seen a price change of 28.51% since the start of the year. The maker of railroad freight car equipment is currently shelling out a dividend of $0.3 per share, with a dividend yield of 2.78%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.94% and the S&P 500's yield of 1.63%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Greenbrier Companies has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.37%. 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. Greenbrier's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GBX expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.50 per share, which represents a year-over-year growth rate of 17.85%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, GBX 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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Why Greenbrier Companies (GBX) is a Top Dividend Stock for Your Portfolio
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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.
Greenbrier Companies in Focus
Greenbrier Companies (GBX - Free Report) is headquartered in Lake Oswego, and is in the Transportation sector. The stock has seen a price change of 28.51% since the start of the year. The maker of railroad freight car equipment is currently shelling out a dividend of $0.3 per share, with a dividend yield of 2.78%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.94% and the S&P 500's yield of 1.63%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Greenbrier Companies has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.37%. 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. Greenbrier's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, GBX expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.50 per share, which represents a year-over-year growth rate of 17.85%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, GBX 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).