Yahoo Finance Why Virtus Investment Partners (VRTS) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Virtus Investment Partners in Focus
Based in Hartford, Virtus Investment Partners (VRTS) is in the Finance sector, and so far this year, shares have seen a price change of -8.66%. The asset management company is paying out a dividend of $1.9 per share at the moment, with a dividend yield of 3.44% compared to the Financial - Investment Management industry's yield of 3.06% and the S&P 500's yield of 1.62%.
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%. 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. Virtus's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
VRTS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $26.58 per share, representing a year-over-year earnings growth rate of 21.09%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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
