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Mid-America Apartment Communities (MAA) Could Be a Great Choice
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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. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Mid-America Apartment Communities in Focus
Headquartered in Germantown, Mid-America Apartment Communities (MAA - Free Report) is a Finance stock that has seen a price change of -32.9% so far this year. The real estate investment trust is paying out a dividend of $1.25 per share at the moment, with a dividend yield of 3.25% compared to the REIT and Equity Trust - Residential industry's yield of 3.64% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $5 is up 22% from last year. Over the last 5 years, Mid-America Apartment Communities has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.95%. 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. Right now, Mid-America Apartment Communities's payout ratio is 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MAA expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $8.29 per share, with earnings expected to increase 18.26% from the year ago period.
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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that MAA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Mid-America Apartment Communities (MAA) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Mid-America Apartment Communities in Focus
Headquartered in Germantown, Mid-America Apartment Communities (MAA - Free Report) is a Finance stock that has seen a price change of -32.9% so far this year. The real estate investment trust is paying out a dividend of $1.25 per share at the moment, with a dividend yield of 3.25% compared to the REIT and Equity Trust - Residential industry's yield of 3.64% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $5 is up 22% from last year. Over the last 5 years, Mid-America Apartment Communities has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.95%. 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. Right now, Mid-America Apartment Communities's payout ratio is 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MAA expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $8.29 per share, with earnings expected to increase 18.26% from the year ago period.
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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that MAA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).