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Equinix (EQIX) is a Top Dividend Stock Right Now: Should You Buy?
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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 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.
Equinix in Focus
Equinix (EQIX - Free Report) is headquartered in Redwood City, and is in the Finance sector. The stock has seen a price change of 3.4% since the start of the year. The data center operator is currently shelling out a dividend of $4.26 per share, with a dividend yield of 2.05%. This compares to the REIT and Equity Trust - Retail industry's yield of 4.46% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $17.04 is up 17.6% from last year. In the past five-year period, Equinix has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.45%. 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. Right now, Equinix's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EQIX expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $34.55 per share, with earnings expected to increase 7.60% 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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that EQIX 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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Equinix (EQIX) is a Top Dividend Stock Right Now: Should You Buy?
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 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.
Equinix in Focus
Equinix (EQIX - Free Report) is headquartered in Redwood City, and is in the Finance sector. The stock has seen a price change of 3.4% since the start of the year. The data center operator is currently shelling out a dividend of $4.26 per share, with a dividend yield of 2.05%. This compares to the REIT and Equity Trust - Retail industry's yield of 4.46% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $17.04 is up 17.6% from last year. In the past five-year period, Equinix has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.45%. 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. Right now, Equinix's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EQIX expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $34.55 per share, with earnings expected to increase 7.60% 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.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that EQIX is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).