American International Group Inc's Dividend Analysis
Exploring the Sustainability of AIG's Dividend Payouts
American International Group Inc (NYSE:AIG) recently announced a dividend of $0.36 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into American International Group Inc's dividend performance and assess its sustainability.
What Does American International Group Inc Do?
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American International Group is a leading insurance and financial services corporation with a significant global presence. It operates through numerous subsidiaries that offer a variety of insurance products including property, casualty, and life insurance. While the company has recently spun off its life insurance operations (Corebridge), it retains a controlling interest, signaling continued involvement in this sector.
A Glimpse at American International Group Inc's Dividend History
American International Group Inc has upheld a steady record of dividend payments since 2013, distributing dividends quarterly. The company has been able to increase its dividend annually since 2013, earning it the title of a dividend achievera distinction awarded to companies with at least 11 consecutive years of dividend increases.
Here is a chart illustrating the annual Dividends Per Share to track historical trends.
Breaking Down American International Group Inc's Dividend Yield and Growth
As of today, American International Group Inc boasts a 12-month trailing dividend yield of 1.88% and a forward dividend yield of 1.94%, indicating anticipated dividend increases over the next year. Over the past three years, the company's annual dividend growth rate was 3.00%, which slows to 1.30% when viewed over a five-year period. However, the long-term perspective is brighter, with an annual dividends per share growth rate of 14.50% over the past decade.
Considering American International Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost for AIG stock is approximately 2.01%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a crucial metric for assessing dividend sustainability. It indicates the proportion of earnings distributed as dividends. A lower ratio suggests a company can fund growth and withstand downturns. American International Group Inc's dividend payout ratio stands at 0.21 as of 2023-12-31.
The company's profitability rank is 5 out of 10, reflecting moderate profitability, with reported net profits in 6 of the past 10 years.
Growth Metrics: The Future Outlook
American International Group Inc's growth rank of 5 out of 10 suggests a fair growth outlook. Its revenue per share and 3-year revenue growth rate indicate a robust revenue model, with an average annual increase of 8.90%, surpassing 62.5% of global competitors.
The 3-year EPS growth rate shows impressive earnings growth, averaging 39.20% per year, outperforming 86.48% of global competitors. Furthermore, the 5-year EBITDA growth rate of 30.30% surpasses 92.26% of global competitors, showcasing strong earnings before interest, taxes, depreciation, and amortization growth.
Next Steps
In conclusion, American International Group Inc's dividend payments, growth rate, payout ratio, and profitability and growth metrics paint a picture of a company with a thoughtful approach to shareholder returns. The consistency in dividend increases, coupled with a low payout ratio and moderate growth prospects, suggests that AIG's dividends are on a sustainable path. Investors should consider these factors, alongside the company's financial health and market position, when evaluating the stock for their portfolios. For those seeking high-dividend yield stocks, GuruFocus offers a High Dividend Yield Screener exclusive to Premium users.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
