Investing in a company that pays a dividend and has a solid growth strategy can be a fantastic way to create passive income. You not only enjoy regular dividend payouts, but you also set yourself up for long-term stock gains as the company grows.
It’s like sitting under a tree: As you enjoy the immediate benefit of shade (dividends), the tree keeps growing, offering even more potential (acorns!) in the future. This combo of steady income and potential capital appreciation can make a dividend-growth stock a win-win for building wealth over time.
Polaris Renewable
Polaris Renewable (TSX:PIF) is an exciting company in the renewable energy space, known for focusing on clean-energy generation through hydroelectric, solar, and wind power projects. With growing global demand for green energy solutions, Polaris is well-positioned to ride the wave of renewable growth — all while offering investors the potential for steady income along the way.
What makes Polaris even more interesting is its long-term vision. It’s committed to expanding its clean energy portfolio, especially in areas like Latin America, where there’s high potential for hydro projects. Its strategy of combining sustainable practices with solid financials makes it a strong contender for investors looking for both growth and a commitment to the planet.
Business results
Polaris’s recent business results have been a mixed bag. On the one hand, its revenue over the trailing 12 months hit $76.9 million, but quarterly revenue took a dip of 10.2% year over year. Quarterly earnings fell a substantial 78.7% compared with the same period a year earlier. Even so, Polaris has managed to maintain a strong operating margin of 31.6%. And the company’s return on assets and equity, though modest at 3.2% and 2.9%, respectively, suggest a stable management approach.
As for valuation, Polaris sits with a forward price-to-earnings (P/E) ratio of 18.9. This could be appealing for future growth prospects, especially given the company’s focus on renewables. The stock’s trailing dividend yield of 4.9%, boosted to a forward yield of 6.7%, might also appeal to dividend-focused investors. Plus, with a payout ratio of 162%, it seems management is committed to rewarding shareholders, even if they’re stretching a bit to do so. Overall, Polaris offers a unique blend of sustainable energy with the potential for both future growth and solid income for patient investors.
Bottom line
Let’s say you invest $15,000 in Polaris stock now. Here is what that could turn into through dividends alone, not accounting for the long-term growth that will likely occur from this stock.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | TOTAL PAYOUT OVER 1 YEAR |
| PIF | $12.11 | 1,239 | $0.60 | $743.40 |
So, there you have it. Even if the stock price doesn’t rise, you could bring in $743.40 in passive income from this dividend stock.
