Assicurazioni Generali's (BIT:G) Upcoming Dividend Will Be Larger Than Last Year's

Assicurazioni Generali S.p.A. (BIT:G) will increase its dividend from last year's comparable payment on the 22nd of May to €1.28. The payment will take the dividend yield to 5.6%, which is in line with the average for the industry.

Check out our latest analysis for Assicurazioni Generali

Assicurazioni Generali's Payment Has Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Based on the last dividend, Assicurazioni Generali is earning enough to cover the payment, but then it makes up 128% of cash flows. The company might be more focused on returning cash to shareholders, but paying out this much of its cash flow could expose the dividend to being cut in the future.

Over the next year, EPS is forecast to expand by 16.3%. If the dividend continues along recent trends, we estimate the payout ratio will be 51%, which is in the range that makes us comfortable with the sustainability of the dividend.

Assicurazioni Generali Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was €0.45, compared to the most recent full-year payment of €1.28. This means that it has been growing its distributions at 11% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Assicurazioni Generali has seen EPS rising for the last five years, at 12% per annum. While on an earnings basis, this company looks appealing as an income stock, the cash payout ratio still makes us cautious.

Our Thoughts On Assicurazioni Generali's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While Assicurazioni Generali is earning enough to cover the payments, the cash flows are lacking. We don't think Assicurazioni Generali is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Assicurazioni Generali that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of 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.