Yahoo Finance Why Hyster-Yale Materials (HY) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
Hyster-Yale Materials in Focus
Hyster-Yale Materials (HY) is headquartered in Cleveland, and is in the Industrial Products sector. The stock has seen a price change of 11.93% since the start of the year. The maker of lift trucks and aftermarket parts is paying out a dividend of $0.35 per share at the moment, with a dividend yield of 2.01% compared to the Manufacturing - Construction and Mining industry's yield of 1.65% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $1.40 is up 7.9% from last year. Hyster-Yale Materials has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 0.60%. 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. Hyster-Yale Materials's current payout ratio is 15%. This means it paid out 15% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HY for this fiscal year. The Zacks Consensus Estimate for 2024 is $7.68 per share, which represents a year-over-year growth rate of 6.08%.
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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that HY is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Hyster-Yale, Inc. (HY) : Free Stock Analysis Report
