Are You Looking for a High-Growth Dividend Stock?
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 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.
Hamilton Lane in Focus
Based in Conshohocken, Hamilton Lane (HLNE) is in the Finance sector, and so far this year, shares have seen a price change of 25.2%. The private-market investment firm is currently shelling out a dividend of $0.44 per share, with a dividend yield of 2.23%. This compares to the Financial - Investment Management industry's yield of 2.86% and the S&P 500's yield of 1.65%.
In terms of dividend growth, the company's current annualized dividend of $1.78 is up 11.3% from last year. Over the last 5 years, Hamilton Lane has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.60%. 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.
HLNE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $3.39 per share, with earnings expected to increase 1.50% from the year ago period.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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).
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Hamilton Lane Inc. (HLNE) : Free Stock Analysis Report
