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Why Eastman Chemical (EMN) 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 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.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of -25.41% so far this year. Currently paying a dividend of $0.76 per share, the company has a dividend yield of 3.37%. In comparison, the Chemical - Diversified industry's yield is 1.99%, while the S&P 500's yield is 1.72%.
Looking at dividend growth, the company's current annualized dividend of $3.04 is up 7.4% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.67%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Eastman Chemical's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
EMN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $9.83 per share, which represents a year-over-year growth rate of 11.07%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, EMN 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 Eastman Chemical (EMN) 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 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.
Eastman Chemical in Focus
Headquartered in Kingsport, Eastman Chemical (EMN - Free Report) is a Basic Materials stock that has seen a price change of -25.41% so far this year. Currently paying a dividend of $0.76 per share, the company has a dividend yield of 3.37%. In comparison, the Chemical - Diversified industry's yield is 1.99%, while the S&P 500's yield is 1.72%.
Looking at dividend growth, the company's current annualized dividend of $3.04 is up 7.4% from last year. Over the last 5 years, Eastman Chemical has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.67%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Eastman Chemical's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
EMN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $9.83 per share, which represents a year-over-year growth rate of 11.07%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, EMN 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).