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Why SJW (SJW) is a Top Dividend Stock for Your Portfolio
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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.
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.
SJW in Focus
Headquartered in San Jose, SJW (SJW - Free Report) is a Utilities stock that has seen a price change of -20.1% so far this year. The parent of San Jose Water Co. Is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.34%. This compares to the Utility - Water Supply industry's yield of 2.12% and the S&P 500's yield of 1.7%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. In the past five-year period, SJW has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.43%. 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. SJW's current payout ratio is 53%, meaning it paid out 53% of its trailing 12-month EPS as dividend.
SJW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.47 per share, representing a year-over-year earnings growth rate of 2.07%.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, SJW 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 SJW (SJW) is a Top Dividend Stock for Your Portfolio
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.
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.
SJW in Focus
Headquartered in San Jose, SJW (SJW - Free Report) is a Utilities stock that has seen a price change of -20.1% so far this year. The parent of San Jose Water Co. Is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.34%. This compares to the Utility - Water Supply industry's yield of 2.12% and the S&P 500's yield of 1.7%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. In the past five-year period, SJW has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.43%. 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. SJW's current payout ratio is 53%, meaning it paid out 53% of its trailing 12-month EPS as dividend.
SJW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.47 per share, representing a year-over-year earnings growth rate of 2.07%.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, SJW 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).