Atlantic Insurance Company Public Limited (CSE:ATL) Is About To Go Ex-Dividend, And It Pays A 7.0% Yield

Atlantic Insurance Company Public Limited (CSE:ATL) is about to trade ex-dividend in the next 4 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Atlantic Insurance Company's shares before the 8th of June in order to be eligible for the dividend, which will be paid on the 26th of June.

The company's upcoming dividend is €0.12 a share, following on from the last 12 months, when the company distributed a total of €0.12 per share to shareholders. Looking at the last 12 months of distributions, Atlantic Insurance Company has a trailing yield of approximately 7.0% on its current stock price of €1.72. 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 Atlantic Insurance Company has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Atlantic Insurance Company

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. Its dividend payout ratio is 84% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Atlantic Insurance Company paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's not encouraging to see that Atlantic Insurance Company's earnings are effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Atlantic Insurance Company has lifted its dividend by approximately 5.5% a year on average.

Final Takeaway

Should investors buy Atlantic Insurance Company for the upcoming dividend? Atlantic Insurance Company has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you want to look further into Atlantic Insurance Company, it's worth knowing the risks this business faces. For example - Atlantic Insurance Company has 3 warning signs we think you should be aware of.

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.

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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.