Why Cabot (CBT) is a Great Dividend Stock Right Now

Entrepreneurs News


This story originally appeared on Zacks

All investors love getting big returns from their portfolio, whether it’s through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

– Zacks

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 percentage 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.

Cabot in Focus

Headquartered in Boston, Cabot (CBT) is a Basic Materials stock that has seen a price change of 31.85% so far this year. The chemical company is currently shelling out a dividend of $ 0.37 per share, with a dividend yield of 2%. This compares to the Chemical – Diversified industry’s yield of 1.53% and the S&P 500’s yield of 1.45%.

Looking at dividend growth, the company’s current annualized dividend of $ 1.48 is up 5.7% from last year. Over the last 5 years, Cabot has increased its dividend 4 times on a year-over-year basis for an average annual increase of 3.46%. 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. Right now, Cabot’s payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as a dividend.

Looking at this fiscal year, CBT expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $ 5.80 per share, which represents a year-over-year growth rate of 15.54%.

Bottom Line

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It’s important to keep in mind that not all companies provide a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it’s fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. 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 CBT is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of # 1 (Strong Buy).

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the # 1 favorite stock to gain + 100% or more in 2021. Previous recommendations have soared + 143.0%, + 175.9%, + 498.3% and + 673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cabot Corporation (CBT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



Source link

Leave a Reply

Your email address will not be published.