Hartford Financial Services Group's (NYSE:HIG) Dividend Will Be Increased To $0.52

The board of The Hartford Financial Services Group, Inc. (NYSE:HIG) has announced that the dividend on 3rd of January will be increased to $0.52, which will be 11% higher than last year's payment of $0.47 which covered the same period. This makes the dividend yield about the same as the industry average at 1.7%.

See our latest analysis for Hartford Financial Services Group

Hartford Financial Services Group's Future Dividend Projections Appear Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Hartford Financial Services Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 39.9% over the next year. 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.

Hartford Financial Services Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.60, compared to the most recent full-year payment of $1.88. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

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 Hartford Financial Services Group has been growing its earnings per share at 17% a year over the past five years. Hartford Financial Services Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Hartford Financial Services Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Hartford Financial Services Group is a strong income stock thanks to its track record and growing earnings. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Hartford Financial Services Group that investors need to be conscious of moving forward. Is Hartford Financial Services Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.