Globe Life (NYSE:GL) Is Increasing Its Dividend To $0.24

Globe Life Inc.'s (NYSE:GL) periodic dividend will be increasing on the 1st of May to $0.24, with investors receiving 6.7% more than last year's $0.225. Although the dividend is now higher, the yield is only 0.8%, which is below the industry average.

Check out our latest analysis for Globe Life

Globe Life's Payment Has Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, prior to this announcement, Globe Life's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 32.8%. If the dividend continues on this path, the payout ratio could be 7.1% by next year, which we think can be pretty sustainable going forward.

Globe Life Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.453 in 2014 to the most recent total annual payment of $0.90. This means that it has been growing its distributions at 7.1% 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 could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Globe Life has been growing its earnings per share at 11% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Globe Life Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Globe Life is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Globe Life that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of 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.