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Are You Looking for a High-Growth Dividend Stock?

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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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.

Based in Greensboro, Tanger (SKT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 6.14%. Currently paying a dividend of $0.29 per share, the company has a dividend yield of 3.3%. In comparison, the REIT and Equity Trust - Retail industry's yield is 3.85%, while the S&P 500's yield is 1.46%.

Looking at dividend growth, the company's current annualized dividend of $1.17 is up 1.5% from last year. Over the last 5 years, Tanger has increased its dividend 4 times on a year-over-year basis for an average annual increase of 14.37%. 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. Tanger's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.

SKT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $2.46 per share, with earnings expected to increase 5.58% from the year ago period.

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.

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, SKT 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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