Coterra Energy (CTRA) is a Top Dividend Stock Right Now: Should You Buy?

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.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.Based in Houston, Coterra Energy (CTRA) is in the Oils-Energy sector, and so far this year, shares have seen a price change of -2.82%. The independent oil and gas company is currently shelling out a dividend of $0.22 per share, with a dividend yield of 3.55%. This compares to the Oil and Gas - Exploration and Production - United States industry's yield of 0.42% and the S&P 500's yield of 1.53%.Looking at dividend growth, the company's current annualized dividend of $0.88 is up 4.8% from last year. Over the last 5 years, Coterra Energy has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.50%. 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. Cabot's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.Earnings growth looks solid for CTRA for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.57 per share, which represents a year-over-year growth rate of 52.98%.Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CTRA 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).Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Coterra Energy Inc. (CTRA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks