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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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
UGI in Focus
Headquartered in King Of Prussia, UGI (UGI - Free Report) is a Utilities stock that has seen a price change of 0.53% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 6.07%. In comparison, the Utility - Gas Distribution industry's yield is 3.36%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.50 is up 2% from last year. In the past five-year period, UGI has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.13%. 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. UGI's current payout ratio is 47%, meaning it paid out 47% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UGI for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.91 per share, representing a year-over-year earnings growth rate of 2.46%.
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 have to be mindful 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 UGI 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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UGI (UGI) Could Be a Great Choice
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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
UGI in Focus
Headquartered in King Of Prussia, UGI (UGI - Free Report) is a Utilities stock that has seen a price change of 0.53% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 6.07%. In comparison, the Utility - Gas Distribution industry's yield is 3.36%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.50 is up 2% from last year. In the past five-year period, UGI has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.13%. 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. UGI's current payout ratio is 47%, meaning it paid out 47% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UGI for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.91 per share, representing a year-over-year earnings growth rate of 2.46%.
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 have to be mindful 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 UGI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).