Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Headquartered in Columbia, COPT Defense (CDP) is a Finance stock that has seen a price change of -8.27% so far this year. Currently paying a dividend of $0.31 per share, the company has a dividend yield of 4.3%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.96%, while the S&P 500's yield is 1.52%.
Looking at dividend growth, the company's current annualized dividend of $1.22 is up 3.4% from last year. Over the last 5 years, COPT Defense has increased its dividend 3 times on a year-over-year basis for an average annual increase of 2.05%. 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. COPT Defense's current payout ratio is 47%, meaning it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CDP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.67 per share, representing a year-over-year earnings growth rate of 3.89%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. That said, they can take comfort from the fact that CDP is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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COPT Defense Properties (CDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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