It looks like Everest Re Group, Ltd. (NYSE:RE) is about to go ex-dividend in the next 4 days. You can purchase shares before the 26th of May in order to receive the dividend, which the company will pay on the 10th of June.
Everest Re Group's next dividend payment will be US$1.55 per share, on the back of last year when the company paid a total of US$6.20 to shareholders. Based on the last year's worth of payments, Everest Re Group has a trailing yield of 3.1% on the current stock price of $199.23. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. Everest Re Group paid out a comfortable 36% 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Everest Re Group's earnings per share have fallen at approximately 8.8% 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. Since the start of our data, ten years ago, Everest Re Group has lifted its dividend by approximately 12% a year on average.
Is Everest Re Group worth buying for its dividend? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We think there are likely better opportunities out there.
If you want to look further into Everest Re Group, it's worth knowing the risks this business faces. Case in point: We've spotted 2 warning signs for Everest Re Group 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.
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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. Thank you for reading.