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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Whitestone (WSR) is headquartered in Houston, and is in the Finance sector. The stock has seen a price change of 36.36% since the start of the year. The real estate investment trust is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.01% compared to the REIT and Equity Trust - Other industry's yield of 4.7% and the S&P 500's yield of 1.39%.
Looking at dividend growth, the company's current annualized dividend of $0.57 is up 5.6% from last year. Over the last 5 years, Whitestone has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.14%. 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. Whitestone's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
WSR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $1.13 per share, representing a year-over-year earnings growth rate of 7.62%.
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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. 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 WSR 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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Whitestone REIT (WSR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).