Yahoo Finance American International Group Inc's Dividend Analysis
Exploring the Sustainability and Growth of AIG's Dividends
American International Group Inc (NYSE:AIG) recently announced a dividend of $0.4 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into American International Group Inc's dividend performance and assess its sustainability.
What Does American International Group Inc Do?
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American International Group is one of the largest insurance and financial services firms in the world and has a global footprint. It operates through a wide range of subsidiaries that provide property, casualty, and life insurance. The company recently spun off its life insurance operations (Corebridge), but still retains a majority stake.
A Glimpse at American International Group Inc's Dividend History
American International Group Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. American International Group Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down American International Group Inc's Dividend Yield and Growth
As of today, American International Group Inc currently has a 12-month trailing dividend yield of 1.95% and a 12-month forward dividend yield of 2.16%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, American International Group Inc's annual dividend growth rate was 3.00%. Extended to a five-year horizon, this rate decreased to 1.30% per year. And over the past decade, American International Group Inc's annual dividends per share growth rate stands at an impressive 14.50%.
Based on American International Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost of American International Group Inc stock as of today is approximately 2.08%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, American International Group Inc's dividend payout ratio is 0.21.
American International Group Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks American International Group Inc's profitability 5 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. American International Group Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and American International Group Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. American International Group Inc's revenue has increased by approximately 8.90% per year on average, a rate that outperforms approximately 55.37% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, American International Group Inc's earnings increased by approximately 39.20% per year on average, a rate that outperforms approximately 81.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 30.30%, which outperforms approximately 90.2% of global competitors.
Conclusion
With a solid track record of dividend payments, a manageable payout ratio, and robust growth metrics, American International Group Inc appears well-positioned to continue rewarding its shareholders with sustainable dividends. As the company navigates the complexities of the financial services industry, its strategic initiatives and operational efficiency will be crucial in maintaining and potentially increasing its dividend payouts. For those interested in exploring further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
