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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.
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.
HNI in Focus
Headquartered in Muscatine, HNI (HNI - Free Report) is a Business Services stock that has seen a price change of 5.67% so far this year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 2.99%. In comparison, the Business - Office Products industry's yield is 2.87%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. Over the last 5 years, HNI has increased its dividend 3 times on a year-over-year basis for an average annual increase of 1.40%. 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. HNI's current payout ratio is 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.10 per share, with earnings expected to increase 16.98% 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. That said, they can take comfort from the fact that HNI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why HNI (HNI) is a Great Dividend Stock Right Now
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.
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.
HNI in Focus
Headquartered in Muscatine, HNI (HNI - Free Report) is a Business Services stock that has seen a price change of 5.67% so far this year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 2.99%. In comparison, the Business - Office Products industry's yield is 2.87%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. Over the last 5 years, HNI has increased its dividend 3 times on a year-over-year basis for an average annual increase of 1.40%. 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. HNI's current payout ratio is 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.10 per share, with earnings expected to increase 16.98% 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. That said, they can take comfort from the fact that HNI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).