How Does Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH) Fare As A Dividend Stock?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 4 years Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH) has returned an average of 9.00% per year to investors in the form of dividend payouts. Let's dig deeper into whether Blue Capital Reinsurance Holdings should have a place in your portfolio. View out our latest analysis for Blue Capital Reinsurance 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 dividend per share risen in the past couple of years?
• Can it afford to pay the current rate of dividends from its earnings?
• Will it be able to continue to payout at the current rate in the future?

How well does Blue Capital Reinsurance Holdings fit our criteria?

Blue Capital Reinsurance Holdings has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. Unfortunately, it is really too early to view Blue Capital Reinsurance Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Blue Capital Reinsurance Holdings generates a yield of 10.44%, which is high for Insurance stocks.

Next Steps:

Taking all the above into account, Blue Capital Reinsurance Holdings is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 essential factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for BCRH’s future growth? Take a look at our free research report of analyst consensus for BCRH’s outlook.
2. Historical Performance: What has BCRH's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.