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Why EastGroup Properties (EGP) is a Great Dividend Stock Right Now
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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
EastGroup Properties in Focus
Based in Ridgeland, EastGroup Properties (EGP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -22.59%. The real estate investment trust is currently shelling out a dividend of $0.75 per share, with a dividend yield of 2.92%. This compares to the REIT and Equity Trust - Other industry's yield of 5.17% and the S&P 500's yield of 2.28%.
In terms of dividend growth, the company's current annualized dividend of $3 is up 2% from last year. EastGroup Properties has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. EastGroup Properties's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
EGP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $5.15 per share, with earnings expected to increase 3.41% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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, EGP 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 EastGroup Properties (EGP) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
EastGroup Properties in Focus
Based in Ridgeland, EastGroup Properties (EGP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -22.59%. The real estate investment trust is currently shelling out a dividend of $0.75 per share, with a dividend yield of 2.92%. This compares to the REIT and Equity Trust - Other industry's yield of 5.17% and the S&P 500's yield of 2.28%.
In terms of dividend growth, the company's current annualized dividend of $3 is up 2% from last year. EastGroup Properties has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. EastGroup Properties's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
EGP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $5.15 per share, with earnings expected to increase 3.41% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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, EGP 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).