If you are interested in cashing in on Assured Guaranty Ltd’s (NYSE:AGO) upcoming dividend of $0.16 per share, you only have 3 days left to buy the shares before its ex-dividend date, 06 March 2018, in time for dividends payable on the 21 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Assured Guaranty’s latest financial data to analyse its dividend attributes. View our latest analysis for Assured Guaranty
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Can it afford 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 does Assured Guaranty fare?
Assured Guaranty has a trailing twelve-month payout ratio of 9.43%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect AGO’s payout to increase to 20.30% of its earnings, which leads to a dividend yield of 1.69%. However, EPS is forecasted to fall to $2.99 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. AGO has increased its DPS from $0.18 to $0.64 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Assured Guaranty generates a yield of 1.85%, which is on the low-side for Insurance stocks.
Keeping in mind the dividend characteristics above, Assured Guaranty is definitely worth considering for investors looking to build a dedicated income portfolio. 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 essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for AGO’s future growth? Take a look at our free research report of analyst consensus for AGO’s outlook.
- Valuation: What is AGO 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 AGO is currently mispriced by the market.
- Other 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.