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Why Unitil (UTL) 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 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.
Unitil in Focus
Unitil (UTL - Free Report) is headquartered in Hampton, and is in the Utilities sector. The stock has seen a price change of 12.15% since the start of the year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 2.81%. In comparison, the Utility - Electric Power industry's yield is 3.26%, while the S&P 500's yield is 1.76%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.62 is up 3.8% from last year. In the past five-year period, Unitil has increased its dividend 5 times on a year-over-year basis for an average annual increase of 1.79%. 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, Unitil's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UTL for this fiscal year. The Zacks Consensus Estimate for 2023 is $2.77 per share, with earnings expected to increase 6.95% 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.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UTL 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 Unitil (UTL) 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 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.
Unitil in Focus
Unitil (UTL - Free Report) is headquartered in Hampton, and is in the Utilities sector. The stock has seen a price change of 12.15% since the start of the year. Currently paying a dividend of $0.41 per share, the company has a dividend yield of 2.81%. In comparison, the Utility - Electric Power industry's yield is 3.26%, while the S&P 500's yield is 1.76%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.62 is up 3.8% from last year. In the past five-year period, Unitil has increased its dividend 5 times on a year-over-year basis for an average annual increase of 1.79%. 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, Unitil's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UTL for this fiscal year. The Zacks Consensus Estimate for 2023 is $2.77 per share, with earnings expected to increase 6.95% 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.
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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, UTL 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).