Yahoo Finance Everest Re Group, Ltd. (NYSE:RE) Is About To Go Ex-Dividend, And It Pays A 0.6% Yield
Everest Re Group, Ltd. (NYSE:RE) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 3rd of September, you won't be eligible to receive this dividend, when it is paid on the 18th of September.
Everest Re Group's upcoming dividend is US$1.40 a share, following on from the last 12 months, when the company distributed a total of US$5.60 per share to shareholders. Calculating the last year's worth of payments shows that Everest Re Group has a trailing yield of 2.3% on the current share price of $239.51. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Everest Re Group can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Everest Re Group
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Everest Re Group paying out a modest 43% of its earnings.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see Everest Re Group's earnings per share have dropped 13% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Everest Re Group has delivered 11% dividend growth per year on average over the past 10 years.
To Sum It Up
Is Everest Re Group an attractive dividend stock, or better left on the shelf? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. 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.
Ever wonder what the future holds for Everest Re Group? See what the seven analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
