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Why Toro (TTC) is a Great Dividend Stock Right Now
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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 for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Toro in Focus
Headquartered in Bloomington, Toro (TTC - Free Report) is a Consumer Discretionary stock that has seen a price change of -5.37% so far this year. The landscaping, maintenance and irrigation equipment maker is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.01% compared to the Tools - Handheld industry's yield of 2.11% and the S&P 500's yield of 1.53%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. Toro has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.22%. 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. Toro's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
TTC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $4.31 per share, representing a year-over-year earnings growth rate of 3.36%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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 TTC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Toro (TTC) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Toro in Focus
Headquartered in Bloomington, Toro (TTC - Free Report) is a Consumer Discretionary stock that has seen a price change of -5.37% so far this year. The landscaping, maintenance and irrigation equipment maker is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.01% compared to the Tools - Handheld industry's yield of 2.11% and the S&P 500's yield of 1.53%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. Toro has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.22%. 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. Toro's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.
TTC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $4.31 per share, representing a year-over-year earnings growth rate of 3.36%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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 TTC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).