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Why Williams-Sonoma (WSM) is a Great Dividend Stock Right Now
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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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Williams-Sonoma in Focus
Williams-Sonoma (WSM - Free Report) is headquartered in San Francisco, and is in the Retail-Wholesale sector. The stock has seen a price change of -26.53% since the start of the year. Currently paying a dividend of $0.78 per share, the company has a dividend yield of 2.51%. In comparison, the Retail - Home Furnishings industry's yield is 0.73%, while the S&P 500's yield is 1.56%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.12 is up 20% from last year. Over the last 5 years, Williams-Sonoma has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.03%. 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. Right now, Williams-Sonoma's payout ratio is 19%, which means it paid out 19% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WSM expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $15.75 per share, which represents a year-over-year growth rate of 6.06%.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that WSM 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 Williams-Sonoma (WSM) is a Great Dividend Stock Right Now
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Williams-Sonoma in Focus
Williams-Sonoma (WSM - Free Report) is headquartered in San Francisco, and is in the Retail-Wholesale sector. The stock has seen a price change of -26.53% since the start of the year. Currently paying a dividend of $0.78 per share, the company has a dividend yield of 2.51%. In comparison, the Retail - Home Furnishings industry's yield is 0.73%, while the S&P 500's yield is 1.56%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.12 is up 20% from last year. Over the last 5 years, Williams-Sonoma has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.03%. 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. Right now, Williams-Sonoma's payout ratio is 19%, which means it paid out 19% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WSM expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $15.75 per share, which represents a year-over-year growth rate of 6.06%.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that WSM is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).