- Oops!Something went wrong.Please try again later.
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Hubbell in Focus
Hubbell (HUBB) is headquartered in Shelton, and is in the Industrial Products sector. The stock has seen a price change of 19.76% since the start of the year. The electrical products manufacturer is currently shelling out a dividend of $0.98 per share, with a dividend yield of 2.09%. This compares to the Manufacturing - Electrical Utilities industry's yield of 2.06% and the S&P 500's yield of 1.34%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.92 is up 5.7% from last year. In the past five-year period, Hubbell has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.41%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Hubbell's current payout ratio is 52%, meaning it paid out 52% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HUBB expects solid earnings growth. The Zacks Consensus Estimate for 2021 is $8.36 per share, with earnings expected to increase 10.29% from the year ago period.
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.
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. That said, they can take comfort from the fact that HUBB is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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
Hubbell Inc (HUBB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research