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It Might Not Be A Great Idea To Buy RenaissanceRe Holdings Ltd. (NYSE:RNR) For Its Next Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that RenaissanceRe Holdings Ltd. (NYSE:RNR) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, RenaissanceRe Holdings investors that purchase the stock on or after the 14th of September will not receive the dividend, which will be paid on the 30th of September.

The company's next dividend payment will be US$0.37 per share, on the back of last year when the company paid a total of US$1.48 to shareholders. Based on the last year's worth of payments, RenaissanceRe Holdings stock has a trailing yield of around 1.0% on the current share price of $141.88. If you buy this business for its dividend, you should have an idea of whether RenaissanceRe Holdings's dividend is reliable and sustainable. As a result, readers should always check whether RenaissanceRe Holdings has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for RenaissanceRe Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. RenaissanceRe Holdings reported a loss last year, so it's not great to see that it has continued paying a dividend.

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

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. RenaissanceRe Holdings reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, RenaissanceRe Holdings has lifted its dividend by approximately 3.6% a year on average.

Get our latest analysis on RenaissanceRe Holdings's balance sheet health here.

Final Takeaway

Is RenaissanceRe Holdings worth buying for its dividend? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Wondering what the future holds for RenaissanceRe Holdings? See what the eight analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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