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Why Huntsman (HUN) is a Great Dividend Stock Right Now
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Huntsman in Focus
Headquartered in The Woodlands, Huntsman (HUN - Free Report) is a Basic Materials stock that has seen a price change of 26.57% so far this year. The chemical company is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.36% compared to the Chemical - Diversified industry's yield of 1.53% and the S&P 500's yield of 1.35%.
Looking at dividend growth, the company's current annualized dividend of $0.75 is up 15.4% from last year. Over the last 5 years, Huntsman has increased its dividend 2 times on a year-over-year basis for an average annual increase of 7.75%. 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. Huntsman's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
HUN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $3.21 per share, with earnings expected to increase 227.55% from the year ago period.
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. However, not all companies offer 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, HUN 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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Why Huntsman (HUN) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Huntsman in Focus
Headquartered in The Woodlands, Huntsman (HUN - Free Report) is a Basic Materials stock that has seen a price change of 26.57% so far this year. The chemical company is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.36% compared to the Chemical - Diversified industry's yield of 1.53% and the S&P 500's yield of 1.35%.
Looking at dividend growth, the company's current annualized dividend of $0.75 is up 15.4% from last year. Over the last 5 years, Huntsman has increased its dividend 2 times on a year-over-year basis for an average annual increase of 7.75%. 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. Huntsman's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
HUN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $3.21 per share, with earnings expected to increase 227.55% from the year ago period.
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. However, not all companies offer 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, HUN 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).