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Why Entergy (ETR) is a Great Dividend Stock Right Now
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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Entergy in Focus
Entergy (ETR - Free Report) is headquartered in New Orleans, and is in the Utilities sector. The stock has seen a price change of -3.76% since the start of the year. The power company is paying out a dividend of $1.07 per share at the moment, with a dividend yield of 3.95% compared to the Utility - Electric Power industry's yield of 3.18% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $4.28 is up 4.4% from last year. In the past five-year period, Entergy has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.34%. 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. Entergy's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ETR for this fiscal year. The Zacks Consensus Estimate for 2023 is $6.69 per share, which represents a year-over-year growth rate of 4.21%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, ETR 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 Entergy (ETR) is a Great Dividend Stock Right Now
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Entergy in Focus
Entergy (ETR - Free Report) is headquartered in New Orleans, and is in the Utilities sector. The stock has seen a price change of -3.76% since the start of the year. The power company is paying out a dividend of $1.07 per share at the moment, with a dividend yield of 3.95% compared to the Utility - Electric Power industry's yield of 3.18% and the S&P 500's yield of 1.57%.
Looking at dividend growth, the company's current annualized dividend of $4.28 is up 4.4% from last year. In the past five-year period, Entergy has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.34%. 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. Entergy's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ETR for this fiscal year. The Zacks Consensus Estimate for 2023 is $6.69 per share, which represents a year-over-year growth rate of 4.21%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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, ETR 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).