Here's What We Like About Dubai Insurance Company (P.S.C.)'s (DFM:DIN) Upcoming Dividend

Dubai Insurance Company (P.S.C.) (DFM:DIN) stock is about to trade ex-dividend in two days. Ex-dividend means that investors that purchase the stock on or after the 9th of March will not receive this dividend, which will be paid on the 1st of January.

Dubai Insurance Company (P.S.C.)'s upcoming dividend is د.إ0.35 a share, following on from the last 12 months, when the company distributed a total of د.إ0.35 per share to shareholders. Based on the last year's worth of payments, Dubai Insurance Company (P.S.C.) has a trailing yield of 4.7% on the current stock price of AED7.5. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Dubai Insurance Company (P.S.C.)

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. Dubai Insurance Company (P.S.C.) paid out 69% of its earnings to investors last year, a normal payout level for most businesses.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Dubai Insurance Company (P.S.C.) paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Dubai Insurance Company (P.S.C.), with earnings per share up 8.7% on average 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 last 10 years, Dubai Insurance Company (P.S.C.) has lifted its dividend by approximately 3.4% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Should investors buy Dubai Insurance Company (P.S.C.) for the upcoming dividend? Dubai Insurance Company (P.S.C.) has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

However if you're still interested in Dubai Insurance Company (P.S.C.) as a potential investment, you should definitely consider some of the risks involved with Dubai Insurance Company (P.S.C.). For example, we've found 2 warning signs for Dubai Insurance Company (P.S.C.) (1 is a bit concerning!) that deserve your attention before investing in the shares.

If you're in the market for dividend stocks, we recommend checking our list of top 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.
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