Carlyle Group (CG) Could Be a Great Choice
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.
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.
Carlyle Group in Focus
Headquartered in Washington, Carlyle Group (CG) is a Finance stock that has seen a price change of 8.72% so far this year. The asset management firm is paying out a dividend of $0.35 per share at the moment, with a dividend yield of 3.16% compared to the Financial - Investment Funds industry's yield of 4.01% and the S&P 500's yield of 1.61%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.40 is up 1.8% from last year. Over the last 5 years, Carlyle Group has increased its dividend 2 times on a year-over-year basis for an average annual increase of 3.39%. 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. Right now, Carlyle's payout ratio is 41%, which means it paid out 41% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CG for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.85 per share, representing a year-over-year earnings growth rate of 18.83%.
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. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CG 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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Carlyle Group Inc. (CG) : Free Stock Analysis Report
