Why Chesapeake Utilities (CPK) is a Great Dividend Stock Right Now

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.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.Chesapeake Utilities in FocusBased in Dover, Chesapeake Utilities (CPK) is in the Utilities sector, and so far this year, shares have seen a price change of -0.19%. The energy and utility company is currently shelling out a dividend of $0.64 per share, with a dividend yield of 2.11%. This compares to the Utility - Gas Distribution industry's yield of 3.36% and the S&P 500's yield of 1.54%.Looking at dividend growth, the company's current annualized dividend of $2.56 is up 2% from last year. Over the last 5 years, Chesapeake Utilities has increased its dividend 5 times on a year-over-year basis for an average annual increase of 9.63%. 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, Chesapeake Utilities's payout ratio is 46%, which means it paid out 46% of its trailing 12-month EPS as dividend.Looking at this fiscal year, CPK expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $6.27 per share, which represents a year-over-year growth rate of 16.33%.Bottom LineFrom greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CPK 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).7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 Chesapeake Utilities Corporation (CPK): 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