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Huntington Ingalls (HII) is a Top Dividend Stock Right Now: Should You Buy?
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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 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.
Huntington Ingalls in Focus
Based in Newport News, Huntington Ingalls (HII - Free Report) is in the Aerospace sector, and so far this year, shares have seen a price change of 3.31%. The shipbuilder is currently shelling out a dividend of $1.14 per share, with a dividend yield of 2.59%. This compares to the Aerospace - Defense industry's yield of 0.01% and the S&P 500's yield of 1.41%.
In terms of dividend growth, the company's current annualized dividend of $4.56 is up 7.8% from last year. In the past five-year period, Huntington Ingalls has increased its dividend 5 times on a year-over-year basis for an average annual increase of 19.39%. 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. Huntington Ingalls's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HII for this fiscal year. The Zacks Consensus Estimate for 2021 is $10.88 per share, representing a year-over-year earnings growth rate of 8.80%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. 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, HII presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Huntington Ingalls (HII) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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.
Huntington Ingalls in Focus
Based in Newport News, Huntington Ingalls (HII - Free Report) is in the Aerospace sector, and so far this year, shares have seen a price change of 3.31%. The shipbuilder is currently shelling out a dividend of $1.14 per share, with a dividend yield of 2.59%. This compares to the Aerospace - Defense industry's yield of 0.01% and the S&P 500's yield of 1.41%.
In terms of dividend growth, the company's current annualized dividend of $4.56 is up 7.8% from last year. In the past five-year period, Huntington Ingalls has increased its dividend 5 times on a year-over-year basis for an average annual increase of 19.39%. 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. Huntington Ingalls's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HII for this fiscal year. The Zacks Consensus Estimate for 2021 is $10.88 per share, representing a year-over-year earnings growth rate of 8.80%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. 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, HII presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).