We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Unitil (UTL) is a Top Dividend Stock Right Now: Should You Buy?
Read MoreHide Full Article
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Unitil in Focus
Unitil (UTL - Free Report) is headquartered in Hampton, and is in the Utilities sector. The stock has seen a price change of -2.13% since the start of the year. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 3.3%. In comparison, the Utility - Electric Power industry's yield is 3.66%, while the S&P 500's yield is 1.54%.
In terms of dividend growth, the company's current annualized dividend of $1.70 is up 4.9% from last year. In the past five-year period, Unitil has increased its dividend 4 times on a year-over-year basis for an average annual increase of 2.50%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Unitil's current payout ratio is 57%, meaning it paid out 57% of its trailing 12-month EPS as dividend.
UTL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.92 per share, which represents a year-over-year growth rate of 3.55%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that UTL is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Unitil (UTL) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Unitil in Focus
Unitil (UTL - Free Report) is headquartered in Hampton, and is in the Utilities sector. The stock has seen a price change of -2.13% since the start of the year. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 3.3%. In comparison, the Utility - Electric Power industry's yield is 3.66%, while the S&P 500's yield is 1.54%.
In terms of dividend growth, the company's current annualized dividend of $1.70 is up 4.9% from last year. In the past five-year period, Unitil has increased its dividend 4 times on a year-over-year basis for an average annual increase of 2.50%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Unitil's current payout ratio is 57%, meaning it paid out 57% of its trailing 12-month EPS as dividend.
UTL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.92 per share, which represents a year-over-year growth rate of 3.55%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that UTL is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).