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Why Urban Edge Properties (UE) is a Top Dividend Stock for Your Portfolio

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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.

Based in New York, Urban Edge Properties (UE - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -3.77%. The real estate investment trust that owns and manages shopping centers is currently shelling out a dividend of $0.19 per share, with a dividend yield of 3.67%. This compares to the REIT and Equity Trust - Retail industry's yield of 4.06% and the S&P 500's yield of 1.49%.

Looking at dividend growth, the company's current annualized dividend of $0.76 is up 11.8% from last year. Over the last 5 years, Urban Edge Properties has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.53%. 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. Urban Edge Properties's current payout ratio is 54%, meaning it paid out 54% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, UE expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.40 per share, which represents a year-over-year growth rate of 3.70%.

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.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UE presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).


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