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Why Avient (AVNT) is a Top Dividend Stock for Your Portfolio
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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Avient in Focus
Headquartered in Avon Lake, Avient (AVNT - Free Report) is a Basic Materials stock that has seen a price change of 16.89% so far this year. The maker of resins used in plastic pipe and other products is currently shelling out a dividend of $0.26 per share, with a dividend yield of 2.12%. This compares to the Chemical - Diversified industry's yield of 2% and the S&P 500's yield of 1.55%.
Looking at dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. In the past five-year period, Avient has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.56%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Avient's current payout ratio is 39%, meaning it paid out 39% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AVNT for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.65 per share, representing a year-over-year earnings growth rate of 12.29%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AVNT 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 Avient (AVNT) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Avient in Focus
Headquartered in Avon Lake, Avient (AVNT - Free Report) is a Basic Materials stock that has seen a price change of 16.89% so far this year. The maker of resins used in plastic pipe and other products is currently shelling out a dividend of $0.26 per share, with a dividend yield of 2.12%. This compares to the Chemical - Diversified industry's yield of 2% and the S&P 500's yield of 1.55%.
Looking at dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. In the past five-year period, Avient has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.56%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Avient's current payout ratio is 39%, meaning it paid out 39% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AVNT for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.65 per share, representing a year-over-year earnings growth rate of 12.29%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AVNT 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).