Why Coterra Energy (CTRA) is a Top Dividend Stock for Your Portfolio

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.Based in Houston, Coterra Energy (CTRA) is in the Oils-Energy sector, and so far this year, shares have seen a price change of -6.58%. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 3.69%. In comparison, the Oil and Gas - Exploration and Production - United States industry's yield is 0.26%, while the S&P 500's yield is 1.5%.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 44%, meaning it paid out 44% of its trailing 12-month EPS as dividend.Looking at this fiscal year, CTRA expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.57 per share, which represents a year-over-year growth rate of 52.98%.From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, 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).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 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