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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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.
American States Water in Focus
Headquartered in San Dimas, American States Water (AWR - Free Report) is a Utilities stock that has seen a price change of 2.36% so far this year. The water and electric utility is currently shelling out a dividend of $0.47 per share, with a dividend yield of 2.26%. This compares to the Utility - Water Supply industry's yield of 2.14% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.86 is up 12.4% from last year. American States Water has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 8.61%. 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. American States Water's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AWR expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.03 per share, representing a year-over-year earnings growth rate of 6.32%.
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.
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. With that in mind, AWR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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.
American States Water in Focus
Headquartered in San Dimas, American States Water (AWR - Free Report) is a Utilities stock that has seen a price change of 2.36% so far this year. The water and electric utility is currently shelling out a dividend of $0.47 per share, with a dividend yield of 2.26%. This compares to the Utility - Water Supply industry's yield of 2.14% and the S&P 500's yield of 1.58%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.86 is up 12.4% from last year. American States Water has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 8.61%. 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. American States Water's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AWR expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $3.03 per share, representing a year-over-year earnings growth rate of 6.32%.
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.
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. With that in mind, AWR presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).