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Why Spire (SR) is a Great Dividend Stock Right Now
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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.
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.
Spire in Focus
Spire (SR - Free Report) is headquartered in St Louis, and is in the Utilities sector. The stock has seen a price change of 3.42% since the start of the year. The natural gas distributor is currently shelling out a dividend of $0.59 per share, with a dividend yield of 3.09%. This compares to the Utility - Gas Distribution industry's yield of 2.79% and the S&P 500's yield of 1.91%.
In terms of dividend growth, the company's current annualized dividend of $2.37 is up 5.3% from last year. In the past five-year period, Spire has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.52%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Spire's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
SR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $3.74 per share, which represents a year-over-year growth rate of 0.54%.
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. 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. That said, they can take comfort from the fact that SR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Spire (SR) is a Great Dividend Stock Right Now
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.
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.
Spire in Focus
Spire (SR - Free Report) is headquartered in St Louis, and is in the Utilities sector. The stock has seen a price change of 3.42% since the start of the year. The natural gas distributor is currently shelling out a dividend of $0.59 per share, with a dividend yield of 3.09%. This compares to the Utility - Gas Distribution industry's yield of 2.79% and the S&P 500's yield of 1.91%.
In terms of dividend growth, the company's current annualized dividend of $2.37 is up 5.3% from last year. In the past five-year period, Spire has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.52%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Spire's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
SR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $3.74 per share, which represents a year-over-year growth rate of 0.54%.
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. 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. That said, they can take comfort from the fact that SR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).