Horace Mann Educators Corporation (NYSE:HMN) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Horace Mann Educators Corporation (NYSE:HMN) is about to trade ex-dividend in the next four days. Ex-dividend means that investors that purchase the stock on or after the 15th of September will not receive this dividend, which will be paid on the 30th of September.
Horace Mann Educators's next dividend payment will be US$0.30 per share, on the back of last year when the company paid a total of US$1.20 to shareholders. Based on the last year's worth of payments, Horace Mann Educators stock has a trailing yield of around 3.2% on the current share price of $37.34. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
View our latest analysis for Horace Mann Educators
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Horace Mann Educators paying out a modest 46% of its earnings.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about Horace Mann Educators's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Horace Mann Educators has delivered an average of 14% per year annual increase in its dividend, based on the past 10 years of dividend payments.
Final Takeaway
Is Horace Mann Educators worth buying for its dividend? Horace Mann Educators has seen its earnings per share stagnate in recent years, although the company reinvests more than half of its profits in the business, which could bode well for its future prospects. In summary, Horace Mann Educators appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Horace Mann Educators for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 2 warning signs for Horace Mann Educators you should know about.
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.
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