Interested In Jackson Financial's (NYSE:JXN) Upcoming US$0.62 Dividend? You Have Four Days Left

Jackson Financial Inc. (NYSE:JXN) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. This means that investors who purchase Jackson Financial's shares on or after the 31st of May will not receive the dividend, which will be paid on the 15th of June.

The company's next dividend payment will be US$0.62 per share, on the back of last year when the company paid a total of US$2.48 to shareholders. Based on the last year's worth of payments, Jackson Financial stock has a trailing yield of around 8.6% on the current share price of $28.8. If you buy this business for its dividend, you should have an idea of whether Jackson Financial's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Jackson Financial

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. Jackson Financial is paying out just 9.6% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Jackson Financial's 11% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Given that Jackson Financial has only been paying a dividend for a year, there's not much of a past history to draw insight from.

The Bottom Line

Should investors buy Jackson Financial for the upcoming dividend? Jackson Financial's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you're not too concerned about Jackson Financial's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For instance, we've identified 5 warning signs for Jackson Financial (1 is a bit concerning) 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.