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Be Sure To Check Out Jefferies Financial Group Inc. (NYSE:JEF) Before It Goes Ex-Dividend

Simply Wall St
·3 min read

Jefferies Financial Group Inc. (NYSE:JEF) is about to trade ex-dividend in the next 3 days. You can purchase shares before the 12th of November in order to receive the dividend, which the company will pay on the 25th of November.

Jefferies Financial Group's next dividend payment will be US$0.15 per share. Last year, in total, the company distributed US$0.60 to shareholders. Based on the last year's worth of payments, Jefferies Financial Group stock has a trailing yield of around 2.9% on the current share price of $20.97. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Jefferies Financial Group can afford its dividend, and if the dividend could grow.

View our latest analysis for Jefferies Financial Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Jefferies Financial Group paying out a modest 26% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Jefferies Financial Group's earnings have been skyrocketing, up 31% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Jefferies Financial Group has delivered 9.1% dividend growth per year on average over the past 10 years. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

From a dividend perspective, should investors buy or avoid Jefferies Financial Group? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Jefferies Financial Group appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while Jefferies Financial Group has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 2 warning signs for Jefferies Financial Group that we recommend you consider before investing in the business.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.