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This is Why Assurant (AIZ) is a Great Dividend Stock
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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.
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.
Assurant in Focus
Headquartered in New York, Assurant (AIZ - Free Report) is a Finance stock that has seen a price change of -4.95% so far this year. The insurer is paying out a dividend of $0.56 per share at the moment, with a dividend yield of 2.34% compared to the Insurance - Multi line industry's yield of 2.06% and the S&P 500's yield of 2.02%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.24 is up 4.2% from last year. In the past five-year period, Assurant has increased its dividend 5 times on a year-over-year basis for an average annual increase of 23.35%. 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. Assurant's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AIZ expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $6.30 per share, representing a year-over-year earnings growth rate of 58.29%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AIZ 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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This is Why Assurant (AIZ) is a Great Dividend Stock
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.
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.
Assurant in Focus
Headquartered in New York, Assurant (AIZ - Free Report) is a Finance stock that has seen a price change of -4.95% so far this year. The insurer is paying out a dividend of $0.56 per share at the moment, with a dividend yield of 2.34% compared to the Insurance - Multi line industry's yield of 2.06% and the S&P 500's yield of 2.02%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.24 is up 4.2% from last year. In the past five-year period, Assurant has increased its dividend 5 times on a year-over-year basis for an average annual increase of 23.35%. 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. Assurant's current payout ratio is 49%. This means it paid out 49% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AIZ expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $6.30 per share, representing a year-over-year earnings growth rate of 58.29%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AIZ 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).