Important news for shareholders and potential investors in James River Group Holdings Ltd (NASDAQ:JRVR): The dividend payment of US$0.30 per share will be distributed into shareholder on 28 September 2018, and the stock will begin trading ex-dividend at an earlier date, 07 September 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at James River Group Holdings’s most recent financial data to examine its dividend characteristics in more detail.
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does James River Group Holdings fit our criteria?
James River Group Holdings has a trailing twelve-month payout ratio of 82.5%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect JRVR’s payout to fall to 51.5% of its earnings, which leads to a dividend yield of 3.3%. However, EPS should increase to $2.61, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider James River Group Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, James River Group Holdings produces a yield of 4.2%, which is high for Insurance stocks.
Keeping in mind the dividend characteristics above, James River Group Holdings is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for JRVR’s future growth? Take a look at our free research report of analyst consensus for JRVR’s outlook.
- Valuation: What is JRVR worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether JRVR is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.