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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.
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.
Wyndham Hotels in Focus
Headquartered in Parsippany, Wyndham Hotels (WH - Free Report) is a Consumer Discretionary stock that has seen a price change of -10% so far this year. The hotel and resort chain is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.1% compared to the Hotels and Motels industry's yield of 0.18% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.6% from last year. Wyndham Hotels has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 18.55%. 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, Wyndham's payout ratio is 39%, which means it paid out 39% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WH expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $4.25 per share, with earnings expected to increase 5.99% 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. 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, WH 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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Wyndham Hotels (WH) Could Be a Great Choice
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.
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.
Wyndham Hotels in Focus
Headquartered in Parsippany, Wyndham Hotels (WH - Free Report) is a Consumer Discretionary stock that has seen a price change of -10% so far this year. The hotel and resort chain is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.1% compared to the Hotels and Motels industry's yield of 0.18% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 8.6% from last year. Wyndham Hotels has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 18.55%. 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, Wyndham's payout ratio is 39%, which means it paid out 39% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, WH expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $4.25 per share, with earnings expected to increase 5.99% 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. 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, WH 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).