Why Brixmor Property (BRX) is a Top Dividend Stock for Your Portfolio
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brixmor Property in Focus
Headquartered in New York, Brixmor Property (BRX) is a Finance stock that has seen a price change of 9.8% so far this year. Currently paying a dividend of $0.27 per share, the company has a dividend yield of 4.27%. In comparison, the REIT and Equity Trust - Retail industry's yield is 4.17%, while the S&P 500's yield is 1.61%.
Looking at dividend growth, the company's current annualized dividend of $1.09 is up 4.8% from last year. Brixmor Property has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 0.31%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Brixmor's payout ratio is 53%, which means it paid out 53% of its trailing 12-month EPS as dividend.
BRX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $2.12 per share, representing a year-over-year earnings growth rate of 3.92%.
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. 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 their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BRX 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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