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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.
Avient in Focus
Avient (AVNT - Free Report) is headquartered in Avon Lake, and is in the Basic Materials sector. The stock has seen a price change of 10.8% since the start of the year. The maker of resins used in plastic pipe and other products is currently shelling out a dividend of $0.26 per share, with a dividend yield of 2.24%. This compares to the Chemical - Diversified industry's yield of 1.93% and the S&P 500's yield of 1.57%.
In terms of dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. Over the last 5 years, Avient has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.65%. 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. Right now, Avient's payout ratio is 42%, which means it paid out 42% of its trailing 12-month EPS as dividend.
AVNT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.61 per share, which represents a year-over-year growth rate of 10.59%.
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.
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. With that in mind, AVNT 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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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.
Avient in Focus
Avient (AVNT - Free Report) is headquartered in Avon Lake, and is in the Basic Materials sector. The stock has seen a price change of 10.8% since the start of the year. The maker of resins used in plastic pipe and other products is currently shelling out a dividend of $0.26 per share, with a dividend yield of 2.24%. This compares to the Chemical - Diversified industry's yield of 1.93% and the S&P 500's yield of 1.57%.
In terms of dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. Over the last 5 years, Avient has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.65%. 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. Right now, Avient's payout ratio is 42%, which means it paid out 42% of its trailing 12-month EPS as dividend.
AVNT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.61 per share, which represents a year-over-year growth rate of 10.59%.
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.
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. With that in mind, AVNT 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).