雅虎香港財經 Why Avient (AVNT) 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. 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.
Avient in Focus
Avient (AVNT) is headquartered in Avon Lake, and is in the Basic Materials sector. The stock has seen a price change of 0.51% since the start of the year. The maker of resins used in plastic pipe and other products is currently shelling out a dividend of $0.26 per share, with a dividend yield of 2.47%. This compares to the Chemical - Diversified industry's yield of 2.02% and the S&P 500's yield of 1.6%.
Looking at dividend growth, the company's current annualized dividend of $1.03 is up 3% from last year. Avient has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.65%. 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. Avient's current payout ratio is 44%, meaning it paid out 44% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AVNT expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.53 per share, with earnings expected to increase 7.20% 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. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious 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 AVNT 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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Avient Corporation (AVNT) : Free Stock Analysis Report
