Investors want huge returns from stocks, bonds, ETFs, other products, or a mix of all. Income investors focus on creating cash flow from each liquid investment.
Cash flow might come from bond interest or other assets, but income investors focus on dividends. Dividend yield, a percentage of the stock price, is a popular tool for investors to evaluate a company's dividend. Dividends often make up over one-third of long-term earnings, according to academic research.
RGC Resources Inc. (RGCO), based in Roanoke, is an Oils-Energy company. Shares have down 7.57% this year. Company dividends are $0.2 per share, yielding 4.26%. Oil and Gas - Refining and Marketing yields 2.86%, while the S&P 500 yields 1.58%.
The company's $0.80 yearly dividend is up 1.5% from previous year. Over the past five years, RGC Resources Inc. has raised its dividend five times, averaging 4.61%.
profits growth and payout ratio—the percentage of a company's yearly profits per share paid out as dividends—will affect dividend growth. RGC Resources Inc.'s payout ratio is 60%, meaning it distributed 60% of its trailing 12-month EPS as dividends.
Additionally, RGCO expects earnings to rise this fiscal year. The Zacks Consensus Estimate for 2024 is $1.16 per share, up 1.75% from the year before.
Investors prefer dividends for several reasons, from increasing stock investing earnings and lowering portfolio risk to tax benefits. However, not all companies pay quarterly.
Big, established companies with stable revenues are frequently the greatest dividend prospects, while high-growth or tech start-ups seldom pay dividends. Income investors should be aware that high-yielding equities struggle when interest rates rise.
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