Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 4 years Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH) has returned an average of 9.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Blue Capital Reinsurance Holdings in more detail. View our latest analysis for Blue Capital Reinsurance Holdings
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does Blue Capital Reinsurance Holdings fit our criteria?
Blue Capital Reinsurance Holdings has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Blue Capital Reinsurance Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Blue Capital Reinsurance Holdings has a yield of 10.35%, which is high for Insurance stocks.
If Blue Capital Reinsurance Holdings is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three key aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for BCRH’s future growth? Take a look at our free research report of analyst consensus for BCRH’s outlook.
- Historical Performance: What has BCRH’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- 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.