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Virtus Investment Partners (VRTS) 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Virtus Investment Partners in Focus
Based in Hartford, Virtus Investment Partners (VRTS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -6.03%. The asset management company is currently shelling out a dividend of $1.9 per share, with a dividend yield of 3.35%. This compares to the Financial - Investment Management industry's yield of 2.92% and the S&P 500's yield of 1.57%.
In terms of dividend growth, the company's current annualized dividend of $7.60 is up 10.9% from last year. Virtus Investment Partners has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 34.30%. 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, Virtus's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
VRTS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $26.41 per share, which represents a year-over-year growth rate of 20.32%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VRTS 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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Virtus Investment Partners (VRTS) 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Virtus Investment Partners in Focus
Based in Hartford, Virtus Investment Partners (VRTS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -6.03%. The asset management company is currently shelling out a dividend of $1.9 per share, with a dividend yield of 3.35%. This compares to the Financial - Investment Management industry's yield of 2.92% and the S&P 500's yield of 1.57%.
In terms of dividend growth, the company's current annualized dividend of $7.60 is up 10.9% from last year. Virtus Investment Partners has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 34.30%. 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, Virtus's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
VRTS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $26.41 per share, which represents a year-over-year growth rate of 20.32%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, VRTS 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).