U.S. Markets closed
  • S&P Futures

    3,447.25
    +15.00 (+0.44%)
     
  • Dow Futures

    28,289.00
    +107.00 (+0.38%)
     
  • Nasdaq Futures

    11,715.00
    +54.25 (+0.47%)
     
  • Russell 2000 Futures

    1,620.80
    +6.00 (+0.37%)
     
  • Crude Oil

    41.51
    +0.05 (+0.12%)
     
  • Gold

    1,922.20
    +6.80 (+0.36%)
     
  • Silver

    25.15
    +0.17 (+0.66%)
     
  • EUR/USD

    1.1843
    +0.0014 (+0.1184%)
     
  • 10-Yr Bond

    0.7970
    +0.0360 (+4.73%)
     
  • Vix

    29.35
    +0.17 (+0.58%)
     
  • GBP/USD

    1.2973
    +0.0026 (+0.1985%)
     
  • USD/JPY

    105.3660
    -0.1040 (-0.0986%)
     
  • BTC-USD

    12,037.84
    +980.83 (+8.87%)
     
  • CMC Crypto 200

    241.67
    +2.75 (+1.15%)
     
  • FTSE 100

    5,889.22
    +4.57 (+0.08%)
     
  • Nikkei 225

    23,676.90
    +109.86 (+0.47%)
     

This is Why Douglas Emmett (DEI) is a Great Dividend Stock

Zacks Equity Research
·3 mins read

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

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.

Douglas Emmett in Focus

Based in Santa Monica, Douglas Emmett (DEI) is in the Finance sector, and so far this year, shares have seen a price change of -24.12%. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.36%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.63%, while the S&P 500's yield is 1.82%.

Looking at dividend growth, the company's current annualized dividend of $1.12 is up 5.7% from last year. Over the last 5 years, Douglas Emmett has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.11%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Douglas Emmett's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.

DEI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $2.13 per share, with earnings expected to increase 1.43% 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. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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, DEI 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
 
Douglas Emmett, Inc. (DEI) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.