Assurant, Inc. (NYSE:AIZ) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 23rd of August in order to receive the dividend, which the company will pay on the 16th of September.
Assurant's next dividend payment will be US$0.60 per share, and in the last 12 months, the company paid a total of US$2.40 per share. Calculating the last year's worth of payments shows that Assurant has a trailing yield of 1.9% on the current share price of $124.53. If you buy this business for its dividend, you should have an idea of whether Assurant's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Assurant paying out a modest 40% of its earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about Assurant's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Assurant has lifted its dividend by approximately 16% a year on average.
Is Assurant an attractive dividend stock, or better left on the shelf? Assurant's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.
Wondering what the future holds for Assurant? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.