Sonic Automotive (SAH) Could Be a Great Choice

Core Insights - Sonic Automotive (SAH) has experienced a price change of 13.43% this year and currently offers a dividend of $0.38 per share, resulting in a dividend yield of 2.12%, which is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.48% and the S&P 500's yield of 1.51% [3] - The company's annualized dividend of $1.52 has increased by 21.6% from the previous year, with an average annual increase of 33.71% over the last five years [4] - The Zacks Consensus Estimate for SAH's earnings in 2025 is $7.21 per share, reflecting an expected increase of 28.75% from the previous year [5] - Sonic Automotive has a current payout ratio of 22%, indicating that it pays out 22% of its trailing 12-month earnings per share as dividends [4] - The company is positioned as an attractive investment opportunity, not only due to its dividend yield but also because it holds a strong Zacks Rank of 1 (Strong Buy) [6] Industry Insights - Dividends are a significant component of long-term returns, often accounting for over one-third of total returns [2] - Established firms with secure profits are typically viewed as the best dividend options, while high-growth businesses and tech startups rarely offer dividends [6] - Income investors should be aware that high-yielding stocks may face challenges during periods of rising interest rates [6]