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Why Tronox (TROX) is a Top Dividend Stock for Your Portfolio
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -50.81% so far this year. The producer of titanium ore and titanium dioxide is currently shelling out a dividend of $0.13 per share, with a dividend yield of 4.23%. This compares to the Chemical - Diversified industry's yield of 2.12% and the S&P 500's yield of 1.77%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Over the last 5 years, Tronox has increased its dividend 3 times on a year-over-year basis 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 19%, meaning it paid out 19% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for TROX for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.27 per share, with earnings expected to increase 42.79% from the year ago period.
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. But, not every company offers 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
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Tronox in Focus
Headquartered in Grimsby, Tronox (TROX - Free Report) is a Basic Materials stock that has seen a price change of -50.81% so far this year. The producer of titanium ore and titanium dioxide is currently shelling out a dividend of $0.13 per share, with a dividend yield of 4.23%. This compares to the Chemical - Diversified industry's yield of 2.12% and the S&P 500's yield of 1.77%.
Looking at dividend growth, the company's current annualized dividend of $0.50 is up 38.9% from last year. Over the last 5 years, Tronox has increased its dividend 3 times on a year-over-year basis 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 19%, meaning it paid out 19% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for TROX for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.27 per share, with earnings expected to increase 42.79% from the year ago period.
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. But, not every company offers 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).