Over the past 10 years Safety Insurance Group Inc (NASDAQ:SAFT) has returned an average of 5.00% per year from dividend payouts. The company currently pays out a dividend yield of 4.27% to shareholders, making it a relatively attractive dividend stock. Does Safety Insurance Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Safety Insurance Group
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
How well does Safety Insurance Group fit our criteria?
Safety Insurance Group has a trailing twelve-month payout ratio of 69.43%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of SAFT it has increased its DPS from $1.6 to $3.2 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. Compared to its peers, Safety Insurance Group produces a yield of 4.27%, which is high for Insurance stocks.
Keeping in mind the dividend characteristics above, Safety Insurance Group is definitely worth considering for investors looking to build a dedicated income portfolio. 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:
- 1. Future Outlook: What are well-informed industry analysts predicting for SAFT’s future growth? Take a look at our free research report of analyst consensus for SAFT’s outlook.
- 2. Valuation: What is SAFT 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 SAFT is currently mispriced by the market.
- 3. 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.