Yahoo Finance Are You Looking for a High-Growth 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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Virtus Investment Partners in Focus
Headquartered in Hartford, Virtus Investment Partners (VRTS) is a Finance stock that has seen a price change of -3.57% so far this year. The asset management company is currently shelling out a dividend of $1.9 per share, with a dividend yield of 3.26%. This compares to the Financial - Investment Management industry's yield of 3% and the S&P 500's yield of 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $7.60 is up 10.9% from last year. In the past five-year period, Virtus Investment Partners has increased its dividend 5 times on a year-over-year basis for an average annual increase of 34.10%. 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. Right now, Virtus's payout ratio is 35%, which means it paid out 35% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for VRTS for this fiscal year. The Zacks Consensus Estimate for 2024 is $27.04 per share, which represents a year-over-year growth rate of 23.19%.
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.
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. 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, VRTS 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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Virtus Investment Partners, Inc. (VRTS) : Free Stock Analysis Report
