Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
InvenTrust Properties Corp. (IVT) is headquartered in Downers Grove, and is in the Finance sector. The stock has seen a price change of 5.46% since the start of the year. The company is currently shelling out a dividend of $0.25 per share, with a dividend yield of 3.36%. This compares to the REIT and Equity Trust - Other industry's yield of 4.37% and the S&P 500's yield of 1.38%.
Looking at dividend growth, the company's current annualized dividend of $1.00 is up 5.2% from last year. Over the last 5 years, InvenTrust Properties Corp. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.82%. 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. InvenTrust Properties's current payout ratio is 53%, meaning it paid out 53% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IVT expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $1.95 per share, representing a year-over-year earnings growth rate of 6.56%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, IVT is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
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InvenTrust Properties Corp. (IVT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).