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Why Tronox (TROX) is a Top Dividend Stock for Your Portfolio
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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -36.45% so far this year. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 3.27%. In comparison, the Chemical - Diversified industry's yield is 2.02%, while the S&P 500's yield is 1.73%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 26.33%. 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. Tronox's current payout ratio is 20%. This means it paid out 20% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.16 per share, which represents a year-over-year growth rate of 37.99%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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, TROX 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 Tronox (TROX) is a Top Dividend Stock for Your Portfolio
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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -36.45% so far this year. Currently paying a dividend of $0.13 per share, the company has a dividend yield of 3.27%. In comparison, the Chemical - Diversified industry's yield is 2.02%, while the S&P 500's yield is 1.73%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Tronox has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 26.33%. 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. Tronox's current payout ratio is 20%. This means it paid out 20% of its trailing 12-month EPS as dividend.
TROX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.16 per share, which represents a year-over-year growth rate of 37.99%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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, TROX 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).