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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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
Headquartered in Denver, M.D.C. Holdings, Inc. is a Construction stock that has seen a price change of 13.76% so far this year. The company is paying out a dividend of $0.55 per share at the moment, with a dividend yield of 3.5% compared to the Building Products - Home Builders industry's yield of 0.71% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $2.20 is up 4.8% from last year. M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis over the last 5 years 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.'s current payout ratio is 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
MDC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.38 per share, with earnings expected to increase 1.70% from the year ago period.
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.
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 MDC 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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M.D.C. Holdings, Inc. (MDC) Could Be a Great Choice
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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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
Headquartered in Denver, M.D.C. Holdings, Inc. is a Construction stock that has seen a price change of 13.76% so far this year. The company is paying out a dividend of $0.55 per share at the moment, with a dividend yield of 3.5% compared to the Building Products - Home Builders industry's yield of 0.71% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $2.20 is up 4.8% from last year. M.D.C. Holdings, Inc. has increased its dividend 4 times on a year-over-year basis over the last 5 years 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.'s current payout ratio is 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
MDC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.38 per share, with earnings expected to increase 1.70% from the year ago period.
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.
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 MDC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).