First Industrial Realty Trust (FR) is a Top Dividend Stock Right Now: Should You Buy?

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.

First Industrial Realty Trust in Focus

First Industrial Realty Trust (FR) is headquartered in Chicago, and is in the Finance sector. The stock has seen a price change of -19.5% since the start of the year. The real estate investment trust is paying out a dividend of $0.29 per share at the moment, with a dividend yield of 2.21% compared to the REIT and Equity Trust - Other industry's yield of 3.65% and the S&P 500's yield of 1.51%.

Looking at dividend growth, the company's current annualized dividend of $1.18 is up 9.3% from last year. First Industrial Realty Trust has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.03%. 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. First Industrial Realty Trust's current payout ratio is 58%. This means it paid out 58% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FR expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.16 per share, with earnings expected to increase 9.64% from the year ago period.

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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FR 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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