Earn 5% from This High-Dividend Stock?
Retire on This High-Dividend Stock?
A high-dividend stock is one that is desired by many income investors. But when it comes to high-dividend stocks, there must be more that is considered than just the yield. For instance, investors need to determine if the dividend is sustainable over the long term, not to mention if the investment, as a whole, is worth one’s time.
I have found a company that would meet this criteria for a high-dividend stock: Tupperware Brands Corporation (NYSE:TUP) stock. Known worldwide, Tupperware is known for its food preparation, storage and serving products. The company operates in more than 100 countries around the world and has been in business since 1946.
As of this writing, the dividend that is paid to shareholders is $0.68 on a quarterly basis. This represents a payout of 69%, which provides safety to the dividend, as well as the possibility of hikes. Since 2012, the payment has nearly doubled, with shares currently trading at $54.07, with a yield of 5.03%.
The dividend has not been the only method by which money has been returned to shareholders, with $1.3 billion worth of shares bought back since 2007. When capital is used to repurchase shares, it signals to the market that the shares are undervalued, at least from management’s point of view. This also results in fewer shares that are outstanding as well, which means each existing share is worth more of the company on a percentage basis.
When comparing the price-to-earnings (P/E) ratio for TUP stock to the S&P 500, the shares look more attractive. The P/E ratio for TUP stock is 13.54 times, as opposed to the S&P 500, which has a ratio of 26.07 times.
This ratio tells investors that $13.54 would be paid for each dollar of earnings, compared to $26.07 for the overall index–hence why the stock looks attractive.
Also, when comparing TUP stock and the S&P 500, there are big differences with the dividend yield as well. Tupperware stock is currently yielding 5.03%, which is roughly two-and-a-half times the S&P 500 ‘s dividend yield of 1.99%.
Final Thoughts on TUP Stock
Over the past year, shares of TUP have gone nowhere, with only the dividend yield offering returns. This could be a great opportunity to consider owning the shares before the market becomes more aware of this high-dividend stock.
Tupperware has a long history and a presence around the world, which is beneficial. That’s because if one market sees a slowdown, another can see growth to offset it.
Whether investing for a rainy day fund or your retirement, dividend investing is a great way to generate some extra income. With money market investment products offering near-zero-percent interest rates; TUP stock is a great high-dividend stock that should not be ignored by investors.
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