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Why MGE (MGEE) is a Top Dividend Stock for Your Portfolio
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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 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.
MGE in Focus
MGE (MGEE - Free Report) is headquartered in Madison, and is in the Utilities sector. The stock has seen a price change of 10.62% since the start of the year. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 2.14%. In comparison, the Utility - Electric Power industry's yield is 3.72%, while the S&P 500's yield is 1.56%.
In terms of dividend growth, the company's current annualized dividend of $1.71 is up 2.4% from last year. In the past five-year period, MGE has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.75%. 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, MGE's payout ratio is 52%, which means it paid out 52% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGEE expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.69 per share, which represents a year-over-year growth rate of 13.54%.
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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MGEE 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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Why MGE (MGEE) is a Top Dividend Stock for Your Portfolio
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 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.
MGE in Focus
MGE (MGEE - Free Report) is headquartered in Madison, and is in the Utilities sector. The stock has seen a price change of 10.62% since the start of the year. Currently paying a dividend of $0.43 per share, the company has a dividend yield of 2.14%. In comparison, the Utility - Electric Power industry's yield is 3.72%, while the S&P 500's yield is 1.56%.
In terms of dividend growth, the company's current annualized dividend of $1.71 is up 2.4% from last year. In the past five-year period, MGE has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.75%. 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, MGE's payout ratio is 52%, which means it paid out 52% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGEE expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.69 per share, which represents a year-over-year growth rate of 13.54%.
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. It's important to keep in mind that not all companies provide 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MGEE 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).