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Whitestone (WSR) Could Be a Great Choice

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

Whitestone (WSR - Free Report) is headquartered in Houston, and is in the Finance sector. The stock has seen a price change of 36.72% since the start of the year. Currently paying a dividend of $0.14 per share, the company has a dividend yield of 3%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.34%, while the S&P 500's yield is 1.45%.

Looking at dividend growth, the company's current annualized dividend of $0.57 is up 5.6% from last year. Over the last 5 years, Whitestone has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.14%. 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. Whitestone's current payout ratio is 53%, meaning it paid out 53% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, WSR expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $1.13 per share, with earnings expected to increase 7.62% 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. But, not every company offers 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 must be conscious 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 WSR is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

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