Back to top

Image: Bigstock

Are You Looking for a High-Growth Dividend Stock?

Read MoreHide Full Article

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.

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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

COPT Defense (CDP - Free Report) is headquartered in Columbia, and is in the Finance sector. The stock has seen a price change of -8.14% since the start of the year. Currently paying a dividend of $0.31 per share, the company has a dividend yield of 4.29%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.87%, while the S&P 500's yield is 1.51%.

Looking at dividend growth, the company's current annualized dividend of $1.22 is up 3.4% from last year. Over the last 5 years, COPT Defense has increased its dividend 3 times on a year-over-year basis for an average annual increase of 2.33%. 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. COPT Defense's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.

CDP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.67 per share, representing a year-over-year earnings growth rate of 3.89%.

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. With that in mind, CDP 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).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


COPT Defense Properties (CDP) - free report >>

Published in