Hamilton Lane (HLNE) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Hamilton Lane in Focus
Headquartered in Conshohocken, Hamilton Lane (HLNE) is a Finance stock that has seen a price change of 34.8% so far this year. The private-market investment firm is paying out a dividend of $0.44 per share at the moment, with a dividend yield of 2.07% compared to the Financial - Investment Management industry's yield of 2.69% and the S&P 500's yield of 1.59%.
Looking at dividend growth, the company's current annualized dividend of $1.78 is up 11.3% from last year. In the past five-year period, Hamilton Lane has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.55%. 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, Hamilton Lane's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HLNE expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.39 per share, which represents a year-over-year growth rate of 1.50%.
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, HLNE 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).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hamilton Lane Inc. (HLNE) : Free Stock Analysis Report
