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Why Invitation Home (INVH) 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. However, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Invitation Home in Focus
Headquartered in Dallas, Invitation Home (INVH - Free Report) is a Finance stock that has seen a price change of 15.69% so far this year. The real estate investment trust focused on single-family rentals is currently shelling out a dividend of $0.26 per share, with a dividend yield of 3.03%. This compares to the REIT and Equity Trust - Residential industry's yield of 4.08% and the S&P 500's yield of 1.67%.
Looking at dividend growth, the company's current annualized dividend of $1.04 is up 18.2% from last year. Over the last 5 years, Invitation Home has increased its dividend 5 times on a year-over-year basis for an average annual increase of 19.14%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Invitation Home's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
INVH is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.79 per share, with earnings expected to increase 7.19% 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. It's important to keep in mind that not all companies provide 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. 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, INVH presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Why Invitation Home (INVH) 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. However, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Invitation Home in Focus
Headquartered in Dallas, Invitation Home (INVH - Free Report) is a Finance stock that has seen a price change of 15.69% so far this year. The real estate investment trust focused on single-family rentals is currently shelling out a dividend of $0.26 per share, with a dividend yield of 3.03%. This compares to the REIT and Equity Trust - Residential industry's yield of 4.08% and the S&P 500's yield of 1.67%.
Looking at dividend growth, the company's current annualized dividend of $1.04 is up 18.2% from last year. Over the last 5 years, Invitation Home has increased its dividend 5 times on a year-over-year basis for an average annual increase of 19.14%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Invitation Home's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
INVH is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $1.79 per share, with earnings expected to increase 7.19% 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. It's important to keep in mind that not all companies provide 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. 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, INVH presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).