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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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Equinix in Focus
Headquartered in Redwood City, Equinix (EQIX - Free Report) is a Finance stock that has seen a price change of 1.56% so far this year. The data center operator is currently shelling out a dividend of $4.26 per share, with a dividend yield of 2.08%. This compares to the REIT and Equity Trust - Retail industry's yield of 3.88% and the S&P 500's yield of 1.56%.
Looking at 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%. 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. Equinix's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EQIX expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $35.10 per share, representing a year-over-year earnings growth rate of 9.31%.
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 must be conscious 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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Are You Looking for a High-Growth Dividend Stock?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Equinix in Focus
Headquartered in Redwood City, Equinix (EQIX - Free Report) is a Finance stock that has seen a price change of 1.56% so far this year. The data center operator is currently shelling out a dividend of $4.26 per share, with a dividend yield of 2.08%. This compares to the REIT and Equity Trust - Retail industry's yield of 3.88% and the S&P 500's yield of 1.56%.
Looking at 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%. 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. Equinix's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, EQIX expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $35.10 per share, representing a year-over-year earnings growth rate of 9.31%.
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 must be conscious 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).