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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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Exxon Mobil in Focus
Based in Spring, Exxon Mobil (XOM - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 14.01%. The oil and natural gas company is paying out a dividend of $0.95 per share at the moment, with a dividend yield of 3.33% compared to the Oil and Gas - Integrated - International industry's yield of 2.85% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 3.3% from last year. Exxon Mobil has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.67%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Exxon's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for XOM for this fiscal year. The Zacks Consensus Estimate for 2024 is $9.57 per share, representing a year-over-year earnings growth rate of 0.53%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, XOM 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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Exxon Mobil in Focus
Based in Spring, Exxon Mobil (XOM - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 14.01%. The oil and natural gas company is paying out a dividend of $0.95 per share at the moment, with a dividend yield of 3.33% compared to the Oil and Gas - Integrated - International industry's yield of 2.85% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.80 is up 3.3% from last year. Exxon Mobil has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.67%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Exxon's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for XOM for this fiscal year. The Zacks Consensus Estimate for 2024 is $9.57 per share, representing a year-over-year earnings growth rate of 0.53%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, XOM 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).