Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
M.D.C. Holdings, Inc. In Focus
Based in Denver, M.D.C. Holdings, Inc. is in the Construction sector, and so far this year, shares have seen a price change of 12.9%. The company is currently shelling out a dividend of $0.55 per share, with a dividend yield of 3.53%. This compares to the Building Products - Home Builders industry's yield of 0.75% and the S&P 500's yield of 1.64%.
In terms of dividend growth, the company's current annualized dividend of $2.20 is up 4.8% from last year. In the past five-year period, M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 19.13%. 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. M.D.C. Holdings, Inc.'s current payout ratio is 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MDC for this fiscal year. The Zacks Consensus Estimate for 2024 is $5.38 per share, which represents a year-over-year growth rate of 1.70%.
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. It's important to keep in mind that not all companies provide 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. 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 MDC 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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Why M.D.C. Holdings, Inc. (MDC) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
M.D.C. Holdings, Inc. In Focus
Based in Denver, M.D.C. Holdings, Inc. is in the Construction sector, and so far this year, shares have seen a price change of 12.9%. The company is currently shelling out a dividend of $0.55 per share, with a dividend yield of 3.53%. This compares to the Building Products - Home Builders industry's yield of 0.75% and the S&P 500's yield of 1.64%.
In terms of dividend growth, the company's current annualized dividend of $2.20 is up 4.8% from last year. In the past five-year period, M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 19.13%. 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. M.D.C. Holdings, Inc.'s current payout ratio is 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MDC for this fiscal year. The Zacks Consensus Estimate for 2024 is $5.38 per share, which represents a year-over-year growth rate of 1.70%.
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. It's important to keep in mind that not all companies provide 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. 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 MDC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).