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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Assured Guaranty in Focus
Assured Guaranty (AGO - Free Report) is headquartered in Hamilton Bermuda, and is in the Finance sector. The stock has seen a price change of -10.02% since the start of the year. The insurance holding company is paying out a dividend of $0.28 per share at the moment, with a dividend yield of 2% compared to the Insurance - Multi line industry's yield of 2.34% and the S&P 500's yield of 1.64%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 12% from last year. In the past five-year period, Assured Guaranty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.92%. 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. Assured Guaranty's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AGO expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $4.60 per share, representing a year-over-year earnings growth rate of 11.11%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AGO 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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Assured Guaranty (AGO) 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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Assured Guaranty in Focus
Assured Guaranty (AGO - Free Report) is headquartered in Hamilton Bermuda, and is in the Finance sector. The stock has seen a price change of -10.02% since the start of the year. The insurance holding company is paying out a dividend of $0.28 per share at the moment, with a dividend yield of 2% compared to the Insurance - Multi line industry's yield of 2.34% and the S&P 500's yield of 1.64%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 12% from last year. In the past five-year period, Assured Guaranty has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.92%. 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. Assured Guaranty's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AGO expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $4.60 per share, representing a year-over-year earnings growth rate of 11.11%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AGO 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).