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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
RGC Resources Inc. In Focus
Based in Roanoke, RGC Resources Inc. (RGCO - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of -7.57%. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 4.26%. In comparison, the Oil and Gas - Refining and Marketing industry's yield is 2.86%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 1.5% from last year. RGC Resources Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.61%. 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, RGC Resources Inc.'s payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
RGCO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $1.16 per share, with earnings expected to increase 1.75% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers 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. 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, RGCO 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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Are You Looking for a High-Growth Dividend Stock?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
RGC Resources Inc. In Focus
Based in Roanoke, RGC Resources Inc. (RGCO - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of -7.57%. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 4.26%. In comparison, the Oil and Gas - Refining and Marketing industry's yield is 2.86%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 1.5% from last year. RGC Resources Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 4.61%. 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, RGC Resources Inc.'s payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
RGCO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $1.16 per share, with earnings expected to increase 1.75% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers 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. 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, RGCO 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).