Yahoo Finance Greenbrier Companies (GBX) Could Be a Great Choice
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Greenbrier Companies in Focus
Headquartered in Lake Oswego, Greenbrier Companies (GBX) is a Transportation stock that has seen a price change of 21.07% so far this year. The maker of railroad freight car equipment is currently shelling out a dividend of $0.3 per share, with a dividend yield of 2.24%. This compares to the Transportation - Equipment and Leasing industry's yield of 1.71% and the S&P 500's yield of 1.59%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 8.1% from last year. Greenbrier Companies has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.66%. 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. Right now, Greenbrier's payout ratio is 31%, which means it paid out 31% of its trailing 12-month EPS as dividend.
GBX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $4.13 per share, which represents a year-over-year growth rate of 39.06%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, GBX presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report
