Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, 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 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.
Headquartered in London, Janus Henderson Group plc (JHG) is a Finance stock that has seen a price change of 0.16% so far this year. The company is paying out a dividend of $0.40 per share at the moment, with a dividend yield of 3.76% compared to the Financial - Investment Management industry's yield of 2.72% and the S&P 500's yield of 1.49%.
Looking at dividend growth, the company's current annualized dividend of $1.60 is up 2.6% from last year. Over the last 5 years, Janus Henderson Group plc has increased its dividend 3 times on a year-over-year basis for an average annual increase of 1.70%. 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. Janus Henderson Group's current payout ratio is 44%, meaning it paid out 44% of its trailing 12-month EPS as dividend.
JHG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $3.62 per share, with earnings expected to increase 2.55% from the year ago period.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, JHG 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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Janus Henderson Group plc (JHG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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