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Why Greenbrier Companies (GBX) is a Great Dividend Stock Right Now
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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Greenbrier Companies in Focus
Headquartered in Lake Oswego, Greenbrier Companies (GBX - Free Report) is a Transportation stock that has seen a price change of 13.54% so far this year. The maker of railroad freight car equipment is currently shelling out a dividend of $0.3 per share, with a dividend yield of 2.39%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.13% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Over the last 5 years, Greenbrier Companies has increased its dividend 2 times on a year-over-year basis for an average annual increase of 2.66%. 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 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GBX for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.82 per share, representing a year-over-year earnings growth rate of 28.62%.
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. Income investors must be conscious 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 GBX 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 Greenbrier Companies (GBX) 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Greenbrier Companies in Focus
Headquartered in Lake Oswego, Greenbrier Companies (GBX - Free Report) is a Transportation stock that has seen a price change of 13.54% so far this year. The maker of railroad freight car equipment is currently shelling out a dividend of $0.3 per share, with a dividend yield of 2.39%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.13% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Over the last 5 years, Greenbrier Companies has increased its dividend 2 times on a year-over-year basis for an average annual increase of 2.66%. 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 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GBX for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.82 per share, representing a year-over-year earnings growth rate of 28.62%.
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. Income investors must be conscious 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 GBX is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).