Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 10 years AXIS Capital Holdings Limited (NYSE:AXS) has returned an average of 3.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether AXIS Capital Holdings should have a place in your portfolio. Check out our latest analysis for AXIS Capital Holdings
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does AXIS Capital Holdings fare?The current payout ratio for AXS is negative, which means that it is loss-making, and paying its dividend from its retained earnings. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. AXS has increased its DPS from $0.74 to $1.56 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes AXS a true dividend rockstar. Relative to peers, AXIS Capital Holdings has a yield of 2.72%, which is on the low-side for Insurance stocks.
Considering the dividend attributes we analyzed above, AXIS Capital Holdings is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three fundamental factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for AXS’s future growth? Take a look at our free research report of analyst consensus for AXS’s outlook.
- Valuation: What is AXS worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether AXS is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.