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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Cambridge in Focus
Based in Cambridge, Cambridge is in the Finance sector, and so far this year, shares have seen a price change of -13.17%. Currently paying a dividend of $0.64 per share, the company has a dividend yield of 3.15%. In comparison, the Banks - Northeast industry's yield is 2.52%, while the S&P 500's yield is 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.56 is up 7.6% from last year. Over the last 5 years, Cambridge has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.68%. 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. Cambridge's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CATC for this fiscal year. The Zacks Consensus Estimate for 2022 is $7.97 per share, which represents a year-over-year growth rate of 2.05%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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, CATC 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).
Image: Bigstock
Why Cambridge (CATC) 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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Cambridge in Focus
Based in Cambridge, Cambridge is in the Finance sector, and so far this year, shares have seen a price change of -13.17%. Currently paying a dividend of $0.64 per share, the company has a dividend yield of 3.15%. In comparison, the Banks - Northeast industry's yield is 2.52%, while the S&P 500's yield is 1.65%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.56 is up 7.6% from last year. Over the last 5 years, Cambridge has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.68%. 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. Cambridge's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CATC for this fiscal year. The Zacks Consensus Estimate for 2022 is $7.97 per share, which represents a year-over-year growth rate of 2.05%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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, CATC 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).