Here's What We Like About ICICI Lombard General Insurance's (NSE:ICICIGI) Upcoming Dividend

It looks like ICICI Lombard General Insurance Company Limited (NSE:ICICIGI) is about to go ex-dividend in the next 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase ICICI Lombard General Insurance's shares before the 27th of October in order to receive the dividend, which the company will pay on the 17th of November.

The company's next dividend payment will be ₹5.00 per share, and in the last 12 months, the company paid a total of ₹10.00 per share. Calculating the last year's worth of payments shows that ICICI Lombard General Insurance has a trailing yield of 0.7% on the current share price of ₹1388.15. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for ICICI Lombard General Insurance

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see ICICI Lombard General Insurance paying out a modest 29% of its 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 the company's payout ratio, plus analyst estimates of its future dividends.

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. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, ICICI Lombard General Insurance's earnings per share have been growing at 13% a year for the past 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, ICICI Lombard General Insurance has increased its dividend at approximately 37% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is ICICI Lombard General Insurance an attractive dividend stock, or better left on the shelf? Companies like ICICI Lombard General Insurance that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, ICICI Lombard General Insurance appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while ICICI Lombard General Insurance has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for ICICI Lombard General Insurance that you should be aware of before investing in their shares.

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

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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.