Janus Henderson Group plc (JHG) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Janus Henderson Group plc in Focus
Based in London, Janus Henderson Group plc (JHG) is in the Finance sector, and so far this year, shares have seen a price change of 33.65%. The company is currently shelling out a dividend of $0.38 per share, with a dividend yield of 3.5%. This compares to the Financial - Investment Management industry's yield of 1.71% and the S&P 500's yield of 1.4%.
In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. In the past five-year period, Janus Henderson Group plc has increased its dividend 3 times on a year-over-year basis for an average annual increase of 8.79%. 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. Janus Henderson Group plc's current payout ratio is 40%. This means it paid out 40% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for JHG for this fiscal year. The Zacks Consensus Estimate for 2021 is $4.06 per share, with earnings expected to increase 34.88% 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. It's important to keep in mind that not all companies provide 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, JHG 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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