U.S. markets close in 5 hours 22 minutes
  • S&P 500

    -3.42 (-0.08%)
  • Dow 30

    -119.85 (-0.35%)
  • Nasdaq

    +24.73 (+0.18%)
  • Russell 2000

    -2.24 (-0.10%)
  • Crude Oil

    -0.45 (-0.73%)
  • Gold

    -7.60 (-0.42%)
  • Silver

    -0.25 (-0.96%)

    -0.0027 (-0.23%)
  • 10-Yr Bond

    -0.0190 (-1.21%)

    -0.0095 (-0.68%)

    +0.0290 (+0.03%)

    -990.64 (-1.78%)
  • CMC Crypto 200

    +32.29 (+2.60%)
  • FTSE 100

    +19.86 (+0.29%)
  • Nikkei 225

    +679.62 (+2.38%)

Don't Buy FBL Financial Group, Inc. (NYSE:FFG) For Its Next Dividend Without Doing These Checks

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

FBL Financial Group, Inc. (NYSE:FFG) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 14th of December in order to receive the dividend, which the company will pay on the 31st of December.

FBL Financial Group's next dividend payment will be US$0.50 per share. Last year, in total, the company distributed US$3.50 to shareholders. Looking at the last 12 months of distributions, FBL Financial Group has a trailing yield of approximately 6.6% on its current stock price of $52.96. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether FBL Financial Group has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for FBL Financial Group

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. FBL Financial Group is paying out an acceptable 62% of its profit, a common payout level among most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.


Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. FBL Financial Group's earnings per share have fallen at approximately 6.2% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. FBL Financial Group has delivered an average of 27% per year annual increase in its dividend, based on the past 10 years of dividend payments. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.

The Bottom Line

Is FBL Financial Group an attractive dividend stock, or better left on the shelf? We're not overly enthused to see FBL Financial Group's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. FBL Financial Group doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.

So if you're still interested in FBL Financial Group despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. For example - FBL Financial Group has 2 warning signs we think you should be aware of.

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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.