Why Toro (TTC) is a Great Dividend Stock Right Now

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.Toro in FocusHeadquartered in Bloomington, Toro (TTC) is a Consumer Discretionary stock that has seen a price change of -5.37% so far this year. The landscaping, maintenance and irrigation equipment maker is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.01% compared to the Tools - Handheld industry's yield of 2.11% and the S&P 500's yield of 1.53%.In terms of dividend growth, the company's current annualized dividend of $1.52 is up 5.6% from last year. Toro has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.22%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Toro's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.TTC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $4.31 per share, representing a year-over-year earnings growth rate of 3.36%.Bottom LineInvestors 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.For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful 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 TTC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks 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 Toro Company (The) (TTC): 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