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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 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Greenbrier Companies in Focus
Based in Lake Oswego, Greenbrier Companies (GBX - Free Report) is in the Transportation sector, and so far this year, shares have seen a price change of 20.33%. Currently paying a dividend of $0.3 per share, the company has a dividend yield of 2.26%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.58%, while the S&P 500's yield is 1.54%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Greenbrier Companies has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.66%. 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. Greenbrier's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
GBX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.82 per share, representing a year-over-year earnings growth rate of 28.62%.
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. However, not all companies offer 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, GBX 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?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Greenbrier Companies in Focus
Based in Lake Oswego, Greenbrier Companies (GBX - Free Report) is in the Transportation sector, and so far this year, shares have seen a price change of 20.33%. Currently paying a dividend of $0.3 per share, the company has a dividend yield of 2.26%. In comparison, the Transportation - Equipment and Leasing industry's yield is 1.58%, while the S&P 500's yield is 1.54%.
Looking at dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Greenbrier Companies has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.66%. 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. Greenbrier's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
GBX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.82 per share, representing a year-over-year earnings growth rate of 28.62%.
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. However, not all companies offer 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, GBX 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).