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Are You Looking for a High-Growth Dividend Stock? IdaCorp (IDA) Could Be a Great Choice

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

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.

IdaCorp in Focus

Based in Boise, IdaCorp (IDA) is in the Utilities sector, and so far this year, shares have seen a price change of 8.06%. The utility company is currently shelling out a dividend of $0.71 per share, with a dividend yield of 2.74%. This compares to the Utility - Electric Power industry's yield of 3.22% and the S&P 500's yield of 1.36%.

In terms of dividend growth, the company's current annualized dividend of $2.84 is up 4.4% from last year. In the past five-year period, IdaCorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 6.76%. 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. Right now, IdaCorp's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for IDA for this fiscal year. The Zacks Consensus Estimate for 2021 is $4.82 per share, with earnings expected to increase 2.77% from the year ago period.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, IDA presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).


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IDACORP, Inc. (IDA): Free Stock Analysis Report
 
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