It looks like Al Fujairah National Insurance Company P.J.S.C (ADX:AFNIC) is about to go ex-dividend in the next 3 days. You can purchase shares before the 28th of May in order to receive the dividend, which the company will pay on the 27th of May.
Al Fujairah National Insurance Company P.J.S.C’s next dividend payment will be د.إ8.00 per share, and in the last 12 months, the company paid a total of د.إ8.00 per share. Based on the last year’s worth of payments, Al Fujairah National Insurance Company P.J.S.C has a trailing yield of 2.9% on the current stock price of AED272.7. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Fortunately Al Fujairah National Insurance Company P.J.S.C’s payout ratio is modest, at just 28% of profit.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we’re encouraged by the steady growth at Al Fujairah National Insurance Company P.J.S.C, with earnings per share up 7.4% on average over the last five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. In the past six years, Al Fujairah National Insurance Company P.J.S.C has increased its dividend at approximately 2.7% a year on average. It’s encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
To Sum It Up
From a dividend perspective, should investors buy or avoid Al Fujairah National Insurance Company P.J.S.C? Al Fujairah National Insurance Company P.J.S.C has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Al Fujairah National Insurance Company P.J.S.C ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
On that note, you’ll want to research what risks Al Fujairah National Insurance Company P.J.S.C is facing. Every company has risks, and we’ve spotted 1 warning sign for Al Fujairah National Insurance Company P.J.S.C you should know about.
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.
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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. 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. Thank you for reading.