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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
HNI in Focus
HNI (HNI - Free Report) is headquartered in Muscatine, and is in the Business Services sector. The stock has seen a price change of 23.86% since the start of the year. The maker of office furniture and fireplaces is currently shelling out a dividend of $0.33 per share, with a dividend yield of 2.55%. This compares to the Business - Office Products industry's yield of 2.59% and the S&P 500's yield of 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.32 is up 3.1% from last year. HNI has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 1.58%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, HNI's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.17 per share, representing a year-over-year earnings growth rate of 19.62%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful 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 HNI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Are You Looking for a High-Growth Dividend Stock?
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
HNI in Focus
HNI (HNI - Free Report) is headquartered in Muscatine, and is in the Business Services sector. The stock has seen a price change of 23.86% since the start of the year. The maker of office furniture and fireplaces is currently shelling out a dividend of $0.33 per share, with a dividend yield of 2.55%. This compares to the Business - Office Products industry's yield of 2.59% and the S&P 500's yield of 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.32 is up 3.1% from last year. HNI has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 1.58%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, HNI's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.17 per share, representing a year-over-year earnings growth rate of 19.62%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful 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 HNI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).