Yahoo Finance Sandvik AB (SDVKY) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 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.
Sandvik AB in Focus
Sandvik AB (SDVKY) is headquartered in Stockholm, and is in the Industrial Products sector. The stock has seen a price change of -0.61% since the start of the year. The company is paying out a dividend of $0.39 per share at the moment, with a dividend yield of 2.16% compared to the Manufacturing - Tools & Related Products industry's yield of 2.18% and the S&P 500's yield of 1.8%.
Looking at dividend growth, the company's current annualized dividend of $0.39 is up 2.6% from last year. Sandvik AB has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 6.77%. 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. Sandvik AB's current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SDVKY for this fiscal year. The Zacks Consensus Estimate for 2023 is $1.25 per share, representing a year-over-year earnings growth rate of 5.04%.
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. But, not every company offers 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 SDVKY is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Sandvik AB (SDVKY) : Free Stock Analysis Report
