Yahoo Finance Avient (AVNT) Could Be a Great Choice
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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Avient in Focus
Based in Avon Lake, Avient (AVNT) is in the Basic Materials sector, and so far this year, shares have seen a price change of 5.68%. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 2.34%. In comparison, the Chemical - Diversified industry's yield is 1.65%, while the S&P 500's yield is 1.59%.
In terms of dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. Over the last 5 years, Avient has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.65%. 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. Avient's current payout ratio is 42%, meaning it paid out 42% of its trailing 12-month EPS as dividend.
AVNT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.61 per share, which represents a year-over-year growth rate of 10.59%.
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.
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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AVNT 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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Avient Corporation (AVNT) : Free Stock Analysis Report
