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Are You Looking for a High-Growth Dividend Stock? ONE Gas (OGS) Could Be a Great Choice
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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
ONE Gas in Focus
ONE Gas (OGS - Free Report) is headquartered in Tulsa, and is in the Utilities sector. The stock has seen a price change of 0.05% since the start of the year. The natural gas distribution is paying out a dividend of $0.58 per share at the moment, with a dividend yield of 3.02% compared to the Utility - Gas Distribution industry's yield of 2.85% and the S&P 500's yield of 1.31%.
In terms of dividend growth, the company's current annualized dividend of $2.32 is up 7.4% from last year. Over the last 5 years, ONE Gas has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.42%. 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. ONE Gas's current payout ratio is 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for OGS for this fiscal year. The Zacks Consensus Estimate for 2021 is $3.83 per share, which represents a year-over-year growth rate of 4.08%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, OGS 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).
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Are You Looking for a High-Growth Dividend Stock? ONE Gas (OGS) 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. 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 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.
ONE Gas in Focus
ONE Gas (OGS - Free Report) is headquartered in Tulsa, and is in the Utilities sector. The stock has seen a price change of 0.05% since the start of the year. The natural gas distribution is paying out a dividend of $0.58 per share at the moment, with a dividend yield of 3.02% compared to the Utility - Gas Distribution industry's yield of 2.85% and the S&P 500's yield of 1.31%.
In terms of dividend growth, the company's current annualized dividend of $2.32 is up 7.4% from last year. Over the last 5 years, ONE Gas has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.42%. 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. ONE Gas's current payout ratio is 59%, meaning it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for OGS for this fiscal year. The Zacks Consensus Estimate for 2021 is $3.83 per share, which represents a year-over-year growth rate of 4.08%.
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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, OGS 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).