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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
HNI in Focus
HNI (HNI - Free Report) is headquartered in Muscatine, and is in the Business Services sector. The stock has seen a price change of 27.06% since the start of the year. The maker of office furniture and fireplaces is currently shelling out a dividend of $0.33 per share, with a dividend yield of 2.48%. This compares to the Business - Office Products industry's yield of 2.49% and the S&P 500's yield of 1.55%.
In terms of dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. HNI has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 1.58%. 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. Right now, HNI's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.17 per share, with earnings expected to increase 19.62% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that HNI is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why HNI (HNI) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
HNI in Focus
HNI (HNI - Free Report) is headquartered in Muscatine, and is in the Business Services sector. The stock has seen a price change of 27.06% since the start of the year. The maker of office furniture and fireplaces is currently shelling out a dividend of $0.33 per share, with a dividend yield of 2.48%. This compares to the Business - Office Products industry's yield of 2.49% and the S&P 500's yield of 1.55%.
In terms of dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. HNI has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 1.58%. 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. Right now, HNI's payout ratio is 43%, which means it paid out 43% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HNI for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.17 per share, with earnings expected to increase 19.62% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that HNI is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).