Yahoo Finance Axis Capital (AXS) 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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Axis Capital in Focus
Headquartered in Pembroke, Axis Capital (AXS) is a Finance stock that has seen a price change of -2.73% so far this year. Currently paying a dividend of $0.44 per share, the company has a dividend yield of 3.34%. In comparison, the Insurance - Property and Casualty industry's yield is 0.69%, while the S&P 500's yield is 1.79%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.76 is up 1.7% from last year. In the past five-year period, Axis Capital has increased its dividend 5 times on a year-over-year basis for an average annual increase of 2.43%. 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. Axis Capital's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
AXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $7.74 per share, with earnings expected to increase 33.22% from the year ago period.
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.
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. That said, they can take comfort from the fact that AXS is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
