MetLife, Inc. (NYSE:MET) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Readers hoping to buy MetLife, Inc. (NYSE:MET) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase MetLife's shares before the 6th of May in order to receive the dividend, which the company will pay on the 10th of June.

The company's next dividend payment will be US$0.5675 per share. Last year, in total, the company distributed US$2.18 to shareholders. Last year's total dividend payments show that MetLife has a trailing yield of 2.9% on the current share price of US$75.37. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately MetLife's payout ratio is modest, at just 36% of profit.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

See our latest analysis for MetLife

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're not enthused to see that MetLife's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. MetLife has delivered an average of 4.5% per year annual increase in its dividend, based on the past 10 years of dividend payments.

Final Takeaway

Should investors buy MetLife for the upcoming dividend? Earnings per share have been flat in recent years, although MetLife reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, MetLife looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in MetLife for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with MetLife and understanding them should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.