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Why Kite Realty Group (KRG) 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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

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.

Kite Realty Group in Focus

Headquartered in Indianapolis, Kite Realty Group (KRG - Free Report) is a Finance stock that has seen a price change of -7.52% so far this year. Currently paying a dividend of $0.25 per share, the company has a dividend yield of 4.73%. In comparison, the REIT and Equity Trust - Retail industry's yield is 4.55%, while the S&P 500's yield is 1.58%.

Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. In the past five-year period, Kite Realty Group has increased its dividend 3 times on a year-over-year basis for an average annual increase of 0.39%. 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. Kite Realty Group's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for KRG for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.05 per share, which represents a year-over-year growth rate of 0.99%.

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. However, not all companies offer 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. That said, they can take comfort from the fact that KRG 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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