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Why Equinix (EQIX) is a Great Dividend Stock Right Now
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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.
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.
Equinix in Focus
Headquartered in Redwood City, Equinix (EQIX - Free Report) is a Finance stock that has seen a price change of 1.67% so far this year. The data center operator is paying out a dividend of $4.26 per share at the moment, with a dividend yield of 2.08% compared to the REIT and Equity Trust - Retail industry's yield of 4.03% and the S&P 500's yield of 1.62%.
In terms of dividend growth, the company's current annualized dividend of $17.04 is up 17.6% from last year. Equinix has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.52%. 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. Equinix's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
EQIX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $34.98 per share, which represents a year-over-year growth rate of 8.94%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, EQIX 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 Equinix (EQIX) 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.
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.
Equinix in Focus
Headquartered in Redwood City, Equinix (EQIX - Free Report) is a Finance stock that has seen a price change of 1.67% so far this year. The data center operator is paying out a dividend of $4.26 per share at the moment, with a dividend yield of 2.08% compared to the REIT and Equity Trust - Retail industry's yield of 4.03% and the S&P 500's yield of 1.62%.
In terms of dividend growth, the company's current annualized dividend of $17.04 is up 17.6% from last year. Equinix has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.52%. 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. Equinix's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
EQIX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $34.98 per share, which represents a year-over-year growth rate of 8.94%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, EQIX 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).