We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are You Looking for a High-Growth Dividend Stock? Emerson Electric (EMR) Could Be a Great Choice
Read MoreHide Full Article
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Emerson Electric in Focus
Based in St. Louis, Emerson Electric (EMR - Free Report) is in the Industrial Products sector, and so far this year, shares have seen a price change of 4.18%. Currently paying a dividend of $0.5 per share, the company has a dividend yield of 2.41%. In comparison, the Manufacturing - Electronics industry's yield is 0.51%, while the S&P 500's yield is 1.42%.
In terms of dividend growth, the company's current annualized dividend of $2.02 is up 1% from last year. Emerson Electric has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 1.27%. 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. Emerson Electric's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $3.49 per share, representing a year-over-year earnings growth rate of 0.87%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide 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 EMR is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are You Looking for a High-Growth Dividend Stock? Emerson Electric (EMR) Could Be a Great Choice
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Emerson Electric in Focus
Based in St. Louis, Emerson Electric (EMR - Free Report) is in the Industrial Products sector, and so far this year, shares have seen a price change of 4.18%. Currently paying a dividend of $0.5 per share, the company has a dividend yield of 2.41%. In comparison, the Manufacturing - Electronics industry's yield is 0.51%, while the S&P 500's yield is 1.42%.
In terms of dividend growth, the company's current annualized dividend of $2.02 is up 1% from last year. Emerson Electric has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 1.27%. 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. Emerson Electric's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EMR expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $3.49 per share, representing a year-over-year earnings growth rate of 0.87%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide 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 EMR is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).