Back to top

Image: Bigstock

Are You Looking for a High-Growth Dividend Stock?

Read MoreHide Full Article

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Headquartered in New York, Urban Edge Properties (UE - Free Report) is a Finance stock that has seen a price change of 14.9% so far this year. Currently paying a dividend of $0.21 per share, the company has a dividend yield of 3.81%. In comparison, the REIT and Equity Trust - Retail industry's yield is 3.94%, while the S&P 500's yield is 1.41%.

Looking at dividend growth, the company's current annualized dividend of $0.84 is up 10.5% 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 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.

UE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $1.50 per share, which represents a year-over-year growth rate of 4.90%.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its 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. With that in mind, UE 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).

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in