AXIS Capital Holdings (NYSE:AXS) Is Increasing Its Dividend To $0.44

AXIS Capital Holdings Limited (NYSE:AXS) will increase its dividend on the 18th of January to $0.44, which is 2.3% higher than last year's payment from the same period of $0.43. This will take the annual payment to 3.0% of the stock price, which is above what most companies in the industry pay.

See our latest analysis for AXIS Capital Holdings

AXIS Capital Holdings' Dividend Is Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, AXIS Capital Holdings' dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 186.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 15% by next year, which is in a pretty sustainable range.

AXIS Capital Holdings Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.96 in 2012 to the most recent total annual payment of $1.72. This means that it has been growing its distributions at 6.0% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

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. It's encouraging to see that AXIS Capital Holdings has been growing its earnings per share at 61% a year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that AXIS Capital Holdings could prove to be a strong dividend payer.

We Really Like AXIS Capital Holdings' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 AXIS Capital Holdings analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is AXIS Capital Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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