All investors love to make great returns on their portfolio, whether it be stocks, bonds, ETFs or other types of securities. But for profitable investors, getting a stable cash flow from each of your liquid investments is your primary concern.
While cash flow can come from interest on bonds or interest on other types of investments, income investors hone dividends. Dividends are a coveted distribution of a company’s profits paid to shareholders, and investors often view it in terms of dividend yield, a metric that measures dividends as a percentage of the current share price. Many academic studies show that dividends account for a significant portion of long-term profits, with dividend contributions in many cases exceeding one third of total profits.
Alexandria real estate promotions in the spotlight
Alexandria Real Estate Equities (ARE), headquartered in Pasadena, operates in the financial sector. Since the beginning of the year, the share price has changed by 7.51%. The company currently pays out dividends of $ 1.12 per share and has a dividend yield of 2.34%. In comparison, the REIT and Equity Trust – Other Industry yield 2.81%, and the S&P 500 yield 1.35%.
Looking at the dividend growth, the company’s current annual dividend of $ 4.48 is up 5.7% over last year. Over the past five-year period, Alexandria Real Estate Equities has increased its dividend by 5 times on an annualized basis, an average of 7.12% per annum. Any future dividend growth will depend on both earnings growth and the company’s payout ratio; The payout ratio is the proportion of a firm’s annual earnings per share that it pays out as dividends. Alexandria Real Estate Equities has a payout ratio of 59% so far, which means it has paid out 59% of its 12-month earnings per share as dividends.
ARE expects stable earnings growth this fiscal year. The Zacks consensus forecast for 2021 is $ 7.76 per share, which translates into 6.30% year-on-year earnings growth.
Investors love dividends for a variety of reasons, from tax benefits and lower overall portfolio risk to dramatic increases in returns on equity investments. However, not all companies offer quarterly payments.
Large, established firms that have more stable profits are often viewed as the best dividend options, but it’s rare to see fast-growing businesses or tech startups offering dividends to their shareholders. Income investors should keep in mind that high-yield stocks tend to struggle during periods of rising interest rates. However, they can take comfort in the fact that ARE is not only an attractive dividend game, but also an attractive investment opportunity with a Zacks # 2 rating (buy).
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