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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 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 -28.28% so far this year. The parent of San Jose Water Co. Is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.61% compared to the Utility - Water Supply industry's yield of 2.3% and the S&P 500's yield of 1.74%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. SJW has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.24%. 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%. This means it paid out 53% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SJW expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.47 per share, with earnings expected to increase 2.07% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that SJW is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 -28.28% so far this year. The parent of San Jose Water Co. Is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.61% compared to the Utility - Water Supply industry's yield of 2.3% and the S&P 500's yield of 1.74%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. SJW has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.24%. 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%. This means it paid out 53% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, SJW expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.47 per share, with earnings expected to increase 2.07% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that SJW is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).