UnipolSai Assicurazioni's (BIT:US) Dividend Will Be €0.19

The board of UnipolSai Assicurazioni S.p.A. (BIT:US) has announced that it will pay a dividend on the 25th of May, with investors receiving €0.19 per share. This means the dividend yield will be fairly typical at 7.1%.

See our latest analysis for UnipolSai Assicurazioni

UnipolSai Assicurazioni'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. Before this announcement, UnipolSai Assicurazioni was paying out 78% of earnings, but a comparatively small 30% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.

Over the next year, EPS is forecast to fall by 1.7%. However, if the dividend continues along recent trends, we estimate the payout ratio could reach 82%, meaning that most of the company's earnings are being paid out to shareholders.

UnipolSai Assicurazioni Doesn't Have A Long Payment History

UnipolSai Assicurazioni's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2014, the dividend has gone from €0.20 to €0.19. The dividend has shrunk at a rate of less than 1% a year over this period. A company that decreases its dividend over time generally isn't what we are looking for.

We Could See UnipolSai Assicurazioni's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. UnipolSai Assicurazioni has seen EPS rising for the last five years, at 6.3% per annum. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.

In Summary

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. This company is not in the top tier of income providing stocks.

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. As an example, we've identified 1 warning sign for UnipolSai Assicurazioni that you should be aware of before investing. Is UnipolSai Assicurazioni not quite the opportunity you were looking for? Why not check out 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.