It looks like The Hartford Financial Services Group, Inc. (NYSE:HIG) is about to go ex-dividend in the next 4 days. If you purchase the stock on or after the 28th of February, you won’t be eligible to receive this dividend, when it is paid on the 2nd of April.
Hartford Financial Services Group’s next dividend payment will be US$0.33 per share. Last year, in total, the company distributed US$1.30 to shareholders. Based on the last year’s worth of payments, Hartford Financial Services Group stock has a trailing yield of around 2.2% on the current share price of $58.05. 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! As a result, readers should always check whether Hartford Financial Services Group has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Hartford Financial Services Group
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Hartford Financial Services Group is paying out just 21% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.
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.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we’re glad to see Hartford Financial Services Group’s earnings per share have risen 13% per annum over the last five years.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. In the past ten years, Hartford Financial Services Group has increased its dividend at approximately 21% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
Is Hartford Financial Services Group an attractive dividend stock, or better left on the shelf? When companies are growing rapidly and retaining a majority of the profits within the business, it’s usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Hartford Financial Services Group appears to have some promise as a dividend stock, and we’d suggest taking a closer look at it.
Curious what other investors think of Hartford Financial Services Group? See what analysts 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.
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.
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