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Why OGE Energy (OGE) is a Top Dividend Stock for Your Portfolio
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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.
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.
OGE Energy in Focus
OGE Energy (OGE - Free Report) is headquartered in Oklahoma City, and is in the Utilities sector. The stock has seen a price change of 12.15% since the start of the year. Currently paying a dividend of $0.37 per share, the company has a dividend yield of 3.96%. In comparison, the Utility - Electric Power industry's yield is 3.22%, while the S&P 500's yield is 1.96%.
In terms of dividend growth, the company's current annualized dividend of $1.46 is up 17.7% from last year. Over the last 5 years, OGE Energy has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.27%. 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. Right now, OGE Energy's payout ratio is 65%, which means it paid out 65% of its trailing 12-month EPS as dividend.
OGE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $2.03 per share, representing a year-over-year earnings growth rate of 5.73%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that OGE 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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Why OGE Energy (OGE) is a Top Dividend Stock for Your Portfolio
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.
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.
OGE Energy in Focus
OGE Energy (OGE - Free Report) is headquartered in Oklahoma City, and is in the Utilities sector. The stock has seen a price change of 12.15% since the start of the year. Currently paying a dividend of $0.37 per share, the company has a dividend yield of 3.96%. In comparison, the Utility - Electric Power industry's yield is 3.22%, while the S&P 500's yield is 1.96%.
In terms of dividend growth, the company's current annualized dividend of $1.46 is up 17.7% from last year. Over the last 5 years, OGE Energy has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.27%. 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. Right now, OGE Energy's payout ratio is 65%, which means it paid out 65% of its trailing 12-month EPS as dividend.
OGE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2018 is $2.03 per share, representing a year-over-year earnings growth rate of 5.73%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that OGE is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).