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This is Why Whirlpool (WHR) is a Great Dividend Stock
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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Whirlpool in Focus
Based in Benton Harbor, Whirlpool (WHR - Free Report) is in the Consumer Discretionary sector, and so far this year, shares have seen a price change of -12.06%. The maker of Maytag, KitchenAid and other appliances is currently shelling out a dividend of $1.4 per share, with a dividend yield of 2.71%. This compares to the Household Appliances industry's yield of 1.94% and the S&P 500's yield of 1.41%.
In terms of dividend growth, the company's current annualized dividend of $5.60 is up 2.8% from last year. Over the last 5 years, Whirlpool has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.63%. 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. Whirlpool's current payout ratio is 21%. This means it paid out 21% of its trailing 12-month EPS as dividend.
WHR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $27.80 per share, with earnings expected to increase 4.55% from the year ago period.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, WHR 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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This is Why Whirlpool (WHR) is a Great Dividend Stock
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.
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.
Whirlpool in Focus
Based in Benton Harbor, Whirlpool (WHR - Free Report) is in the Consumer Discretionary sector, and so far this year, shares have seen a price change of -12.06%. The maker of Maytag, KitchenAid and other appliances is currently shelling out a dividend of $1.4 per share, with a dividend yield of 2.71%. This compares to the Household Appliances industry's yield of 1.94% and the S&P 500's yield of 1.41%.
In terms of dividend growth, the company's current annualized dividend of $5.60 is up 2.8% from last year. Over the last 5 years, Whirlpool has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.63%. 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. Whirlpool's current payout ratio is 21%. This means it paid out 21% of its trailing 12-month EPS as dividend.
WHR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $27.80 per share, with earnings expected to increase 4.55% from the year ago period.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, WHR 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).