Gjensidige Forsikring ASA (OB:GJF) Is About To Go Ex-Dividend, And It Pays A 3.6% Yield

Gjensidige Forsikring ASA (OB:GJF) is about to trade ex-dividend in the next three days. This means that investors who purchase shares on or after the 25th of March will not receive the dividend, which will be paid on the 7th of April.

Gjensidige Forsikring's next dividend payment will be kr7.40 per share, and in the last 12 months, the company paid a total of kr7.40 per share. Calculating the last year's worth of payments shows that Gjensidige Forsikring has a trailing yield of 3.6% on the current share price of NOK203.8. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Gjensidige Forsikring has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Gjensidige Forsikring

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Gjensidige Forsikring is paying out an acceptable 75% of its profit, a common payout level among most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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. This is why it's a relief to see Gjensidige Forsikring earnings per share are up 5.5% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Gjensidige Forsikring has delivered an average of 4.6% per year annual increase in its dividend, based on the past 10 years of dividend payments. 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.

Final Takeaway

Should investors buy Gjensidige Forsikring for the upcoming dividend? Gjensidige Forsikring 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. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you're not too concerned about Gjensidige Forsikring's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, we've found 1 warning sign for Gjensidige Forsikring that we recommend you consider before investing in the business.

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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