Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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.
Urban Edge Properties (UE) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of -7.26% since the start of the year. The real estate investment trust that owns and manages shopping centers is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 3.81% compared to the REIT and Equity Trust - Retail industry's yield of 4.22% and the S&P 500's yield of 1.48%.
Looking at dividend growth, the company's current annualized dividend of $0.76 is up 11.8% from last year. Over the last 5 years, Urban Edge Properties has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.53%. 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. Urban Edge Properties's current payout ratio is 56%, meaning it paid out 56% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for UE for this fiscal year. The Zacks Consensus Estimate for 2025 is $1.40 per share, with earnings expected to increase 3.70% from the year ago period.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, UE presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Urban Edge Properties (UE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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