Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.
Rexford Industrial in Focus
Headquartered in Los Angeles, Rexford Industrial (REXR) is a Finance stock that has seen a price change of 21.28% so far this year. The industrial real estate investment trust is currently shelling out a dividend of $0.19 per share, with a dividend yield of 2.07%. This compares to the REIT and Equity Trust - Other industry's yield of 4.18% and the S&P 500's yield of 1.89%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.74 is up 15.6% from last year. In the past five-year period, Rexford Industrial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8.15%. 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, Rexford Industrial's payout ratio is 58%, which means it paid out 58% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for REXR for this fiscal year. The Zacks Consensus Estimate for 2019 is $1.18 per share, which represents a year-over-year growth rate of 5.36%.
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, REXR 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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Rexford Industrial Realty, Inc. (REXR) : Free Stock Analysis Report
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