Globe Life (NYSE:GL) Is Increasing Its Dividend To $0.24
The board of Globe Life Inc. (NYSE:GL) has announced that it will be increasing its dividend by 6.7% on the 1st of May to $0.24, up from last year's comparable payment of $0.225. Despite this raise, the dividend yield of 0.8% is only a modest boost to shareholder returns.
View our latest analysis for Globe Life
Globe Life's Earnings Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Globe Life's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 32.8%. If the dividend continues along recent trends, we estimate the payout ratio will be 7.1%, which is in the range that makes us comfortable with the sustainability of the dividend.
Globe Life Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.453 total annually to $0.90. This implies that the company grew its distributions at a yearly rate of about 7.1% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Globe Life has seen EPS rising for the last five years, at 11% per annum. Globe Life definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Globe Life's Dividend
Overall, a dividend increase is always good, and we think that Globe Life is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Globe Life that investors should know about before committing capital to this stock. Is Globe Life not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
