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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
UGI in Focus
Based in King Of Prussia, UGI (UGI - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 3.17%. The natural gas and electric utilities operator. Is currently shelling out a dividend of $0.38 per share, with a dividend yield of 5.91%. This compares to the Utility - Gas Distribution industry's yield of 3.58% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.50 is up 2% from last year. UGI has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.13%. 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. Right now, UGI's payout ratio is 52%, which means it paid out 52% of its trailing 12-month EPS as dividend.
UGI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.90 per share, representing a year-over-year earnings growth rate of 2.11%.
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. But, not every company offers 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UGI 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?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
UGI in Focus
Based in King Of Prussia, UGI (UGI - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 3.17%. The natural gas and electric utilities operator. Is currently shelling out a dividend of $0.38 per share, with a dividend yield of 5.91%. This compares to the Utility - Gas Distribution industry's yield of 3.58% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.50 is up 2% from last year. UGI has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.13%. 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. Right now, UGI's payout ratio is 52%, which means it paid out 52% of its trailing 12-month EPS as dividend.
UGI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.90 per share, representing a year-over-year earnings growth rate of 2.11%.
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. But, not every company offers 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UGI 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).