MetLife Inc's Dividend Analysis
An In-Depth Look at MetLife Inc's Upcoming Dividend and Its Sustainability
MetLife Inc (NYSE:MET) recently announced a dividend of $0.52 per share, payable on 2024-03-14, with the ex-dividend date set for 2024-02-05. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into MetLife Inc's dividend performance and assess its sustainability.
What Does MetLife Inc Do?
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MetLife is one of the largest life insurers in the U.S. by assets and provides a variety of insurance and financial services products. The company is organized into five segments: U.S., Asia, Latin America, EMEA, and MetLife Holdings. The U.S. business contributes around 41% of earnings and is broken into the group benefits segment and the retirement solutions segment. The Asia segment contributes around 28% of earnings and is mainly composed of the Japan business with increasing contributions from India, China, and Bangladesh. The company also holds leading market positions in Mexico and Chile with the Latin America segment contributing around 6% of earnings. The EMEA and the MetLife segments contribute around 5% and 20% of earnings, respectively.
A Glimpse at MetLife Inc's Dividend History
MetLife Inc has maintained a consistent dividend payment record since 2000. Dividends are currently distributed on a quarterly basis. MetLife Inc has increased its dividend each year since 2000. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 24 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down MetLife Inc's Dividend Yield and Growth
As of today, MetLife Inc currently has a 12-month trailing dividend yield of 3.12% and a 12-month forward dividend yield of 3.15%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, MetLife Inc's annual dividend growth rate was 4.40%. Extended to a five-year horizon, this rate stayed the same. And over the past decade, MetLife Inc's annual dividends per share growth rate stands at 8.30%. Based on MetLife Inc's dividend yield and five-year growth rate, the 5-year yield on cost of MetLife Inc stock as of today is approximately 3.87%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, MetLife Inc's dividend payout ratio is 0.35.
MetLife Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MetLife Inc's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. MetLife Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and MetLife Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. MetLife Inc's revenue has increased by approximately 5.40% per year on average, a rate that outperforms approximately 52.77% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, MetLife Inc's earnings increased by approximately -22.10% per year on average, a rate that outperforms approximately 18.01% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -3.30%, which outperforms approximately 23.55% of global competitors.
Next Steps
In conclusion, MetLife Inc's dividend payments, consistent dividend growth rate, manageable payout ratio, and fair profitability and growth metrics make it a potential candidate for value investors seeking stable income. The company's ability to maintain positive net income and its strategic positioning in various international markets contribute to a promising outlook for dividend sustainability. As investors consider adding MetLife Inc to their portfolios, they should also monitor industry trends, regulatory factors, and the company's ongoing strategic initiatives to ensure that the dividend prospects remain attractive. Will MetLife Inc continue its trajectory of dividend growth, and how will market conditions affect its future payouts? These are key questions for investors to ponder as they assess the company's long-term potential.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
