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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Regency Centers in Focus
Regency Centers (REG) is headquartered in Jacksonville, and is in the Finance sector. The stock has seen a price change of 11.38% since the start of the year. Currently paying a dividend of $0.58 per share, the company has a dividend yield of 3.58%. In comparison, the REIT and Equity Trust - Retail industry's yield is 5.64%, while the S&P 500's yield is 1.92%.
Taking a look at the company's dividend growth, its current annualized dividend of $2.34 is up 5.4% from last year. Over the last 5 years, Regency Centers has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.69%. 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. Regency Centers's current payout ratio is 60%, meaning it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, REG expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $3.84 per share, representing a year-over-year earnings growth rate of 0.26%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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, REG 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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Regency Centers Corporation (REG) : Free Stock Analysis Report
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