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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 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 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.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 11.15% so far this year. The specialty chemicals maker is paying out a dividend of $0.81 per share at the moment, with a dividend yield of 3.25% compared to the Chemical - Diversified industry's yield of 1.79% and the S&P 500's yield of 1.54%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.24 is up 1.9% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.14%. 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. Eastman Chemical's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $7.76 per share, which represents a year-over-year growth rate of 21.25%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, EMN 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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Are You Looking for a High-Growth Dividend Stock?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of 11.15% so far this year. The specialty chemicals maker is paying out a dividend of $0.81 per share at the moment, with a dividend yield of 3.25% compared to the Chemical - Diversified industry's yield of 1.79% and the S&P 500's yield of 1.54%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.24 is up 1.9% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.14%. 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. Eastman Chemical's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $7.76 per share, which represents a year-over-year growth rate of 21.25%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, EMN 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).