All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Rexford Industrial in Focus
Rexford Industrial is headquartered in Los Angeles, and is in the Finance sector. The stock has seen a price change of -9.42% since the start of the year. Currently paying a dividend of $0.19 per share, the company has a dividend yield of 2.08%. In comparison, the REIT and Equity Trust - Other industry's yield is 5.91%, while the S&P 500's yield is 2.3%.
Looking at dividend growth, the company's current annualized dividend of $0.86 is up 16.2% from last year. In the past five-year period, Rexford Industrial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 9.39%. 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. Rexford Industrial's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, REXR expects solid earnings growth. The Zacks Consensus Estimate for 2020 is $1.31 per share, which represents a year-over-year growth rate of 6.50%.
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 their 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, REXR 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).