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Why The Hartford (HIG) 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. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
The Hartford in Focus
Based in Hartford, The Hartford (HIG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.56%. The insurance and financial services company is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.13% compared to the Insurance - Multi line industry's yield of 1.73% and the S&P 500's yield of 1.37%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.54 is up 7.3% from last year. In the past five-year period, The Hartford has increased its dividend 4 times on a year-over-year basis for an average annual increase of 10.70%. 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. The Hartford's current payout ratio is 24%. This means it paid out 24% of its trailing 12-month EPS as dividend.
HIG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $7 per share, with earnings expected to increase 13.82% 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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HIG is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why The Hartford (HIG) 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. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
The Hartford in Focus
Based in Hartford, The Hartford (HIG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.56%. The insurance and financial services company is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.13% compared to the Insurance - Multi line industry's yield of 1.73% and the S&P 500's yield of 1.37%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.54 is up 7.3% from last year. In the past five-year period, The Hartford has increased its dividend 4 times on a year-over-year basis for an average annual increase of 10.70%. 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. The Hartford's current payout ratio is 24%. This means it paid out 24% of its trailing 12-month EPS as dividend.
HIG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $7 per share, with earnings expected to increase 13.82% 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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HIG is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).