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This is Why Axis Capital (AXS) is a Great Dividend Stock
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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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Axis Capital in Focus
Based in Pembroke, Axis Capital (AXS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 1.03%. The insurance company is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.13% compared to the Insurance - Property and Casualty industry's yield of 1.07% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. In the past five-year period, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.40%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Axis Capital's payout ratio is 28%, which means it paid out 28% of its trailing 12-month EPS as dividend.
AXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $6.33 per share, representing a year-over-year earnings growth rate of 23.63%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. That said, they can take comfort from the fact that AXS 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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This is Why Axis Capital (AXS) is a Great Dividend Stock
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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Axis Capital in Focus
Based in Pembroke, Axis Capital (AXS - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 1.03%. The insurance company is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 3.13% compared to the Insurance - Property and Casualty industry's yield of 1.07% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $1.72 is up 2.4% from last year. In the past five-year period, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.40%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Axis Capital's payout ratio is 28%, which means it paid out 28% of its trailing 12-month EPS as dividend.
AXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $6.33 per share, representing a year-over-year earnings growth rate of 23.63%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. That said, they can take comfort from the fact that AXS is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).