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Why Unitil (UTL) is a Top Dividend Stock for Your Portfolio
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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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Unitil in Focus
Based in Hampton, Unitil (UTL - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of -6.51%. The utility is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.46% compared to the Utility - Electric Power industry's yield of 3.87% and the S&P 500's yield of 1.62%.
Looking at 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 5 times on a year-over-year basis for an average annual increase of 2.50%. Looking ahead, future dividend growth will be dependent on earnings growth and 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%. This means it paid out 57% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UTL for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.92 per share, representing a year-over-year earnings growth rate of 3.55%.
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. 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. With that in mind, UTL 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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Why Unitil (UTL) is a Top Dividend Stock for Your Portfolio
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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Unitil in Focus
Based in Hampton, Unitil (UTL - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of -6.51%. The utility is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.46% compared to the Utility - Electric Power industry's yield of 3.87% and the S&P 500's yield of 1.62%.
Looking at 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 5 times on a year-over-year basis for an average annual increase of 2.50%. Looking ahead, future dividend growth will be dependent on earnings growth and 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%. This means it paid out 57% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UTL for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.92 per share, representing a year-over-year earnings growth rate of 3.55%.
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. 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. With that in mind, UTL 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).