This is Why Ryman Hospitality Properties (RHP) is a Great Dividend Stock
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 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.
Ryman Hospitality Properties in Focus
Headquartered in Nashville, Ryman Hospitality Properties (RHP) is a Finance stock that has seen a price change of 20.62% so far this year. The hotel and resort real estate investment trust is paying out a dividend of $0.9 per share at the moment, with a dividend yield of 4.48% compared to the REIT and Equity Trust - Other industry's yield of 4.18% and the S&P 500's yield of 1.91%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.60 is up 5.9% from last year. Over the last 5 years, Ryman Hospitality Properties has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.49%. 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. Ryman Hospitality Properties's current payout ratio is 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for RHP for this fiscal year. The Zacks Consensus Estimate for 2019 is $6.79 per share, representing a year-over-year earnings growth rate of 15.87%.
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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, RHP 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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