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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 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 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.
Unum in Focus
Unum (UNM - Free Report) is headquartered in Chattanooga, and is in the Finance sector. The stock has seen a price change of -5.34% since the start of the year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.4%. In comparison, the Insurance - Accident and Health industry's yield is 2.6%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $1.32 is up 4.8% from last year. Over the last 5 years, Unum has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.80%. 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. Right now, Unum's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UNM for this fiscal year. The Zacks Consensus Estimate for 2023 is $6.68 per share, with earnings expected to increase 7.57% 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. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 UNM 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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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Unum in Focus
Unum (UNM - Free Report) is headquartered in Chattanooga, and is in the Finance sector. The stock has seen a price change of -5.34% since the start of the year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.4%. In comparison, the Insurance - Accident and Health industry's yield is 2.6%, while the S&P 500's yield is 1.76%.
Looking at dividend growth, the company's current annualized dividend of $1.32 is up 4.8% from last year. Over the last 5 years, Unum has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.80%. 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. Right now, Unum's payout ratio is 21%, which means it paid out 21% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UNM for this fiscal year. The Zacks Consensus Estimate for 2023 is $6.68 per share, with earnings expected to increase 7.57% 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. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 UNM is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).