A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. In the past 10 years AXIS Capital Holdings Limited (NYSE:AXS) has returned an average of 3.00% per year to investors in the form of dividend payouts. Does AXIS Capital Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for AXIS Capital Holdings
Here’s how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does AXIS Capital Holdings fit our criteria?
AXIS Capital Holdings has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of AXS it has increased its DPS from $0.74 to $1.56 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes AXS a true dividend rockstar. Compared to its peers, AXIS Capital Holdings produces a yield of 2.71%, which is on the low-side for Insurance stocks.
Taking into account the dividend metrics, AXIS Capital Holdings ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. I’ve put together three important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for AXS’s future growth? Take a look at our free research report of analyst consensus for AXS’s outlook.
- Valuation: What is AXS 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 AXS 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 pass 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.