Only 1 Days Left Before Hiscox Ltd (LON:HSX) Will Be Trading Ex-Dividend
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Attention dividend hunters! Hiscox Ltd (LON:HSX) will be distributing its dividend of US$0.29 per share on the 12 June 2019, and will start trading ex-dividend in 1 days time on the 09 May 2019. What does this mean for current shareholders and potential investors? Below, I will explain how holding Hiscox can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes.
Check out our latest analysis for Hiscox
Here's how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
Is their annual yield among the top 25% 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 its earnings sufficient to payout dividend at the current rate?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Hiscox pass our checks?
The company currently pays out 93% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. However, going forward, analysts expect HSX's payout to fall into a more sustainable range of 38% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 2.4%. Furthermore, EPS should increase to $1.15, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Compared to its peers, Hiscox has a yield of 2.0%, which is on the low-side for Insurance stocks.
Next Steps:
After digging a little deeper into Hiscox's yield, it's easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three key factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for HSX’s future growth? Take a look at our free research report of analyst consensus for HSX’s outlook.
Valuation: What is HSX worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether HSX is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
