It looks like Argo Group International Holdings, Ltd. (NYSE:ARGO) is about to go ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 29th of August will not receive the dividend, which will be paid on the 13th of September.
Argo Group International Holdings's next dividend payment will be US$0.31 per share, and in the last 12 months, the company paid a total of US$1.24 per share. Calculating the last year's worth of payments shows that Argo Group International Holdings has a trailing yield of 1.9% on the current share price of $65.56. If you buy this business for its dividend, you should have an idea of whether Argo Group International Holdings's dividend is reliable and sustainable. As a result, readers should always check whether Argo Group International Holdings has been able to grow its dividends, or if the dividend might be cut.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Argo Group International Holdings paid out a comfortable 34% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Argo Group International Holdings's earnings are down 2.1% a year over the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Argo Group International Holdings has increased its dividend at approximately 15% a year on average.
The Bottom Line
From a dividend perspective, should investors buy or avoid Argo Group International Holdings? Argo Group International Holdings's earnings per share are down over the past 5 years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.
Wondering what the future holds for Argo Group International Holdings? See what the five analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.