Just Three Days Till The Travelers Companies, Inc. (NYSE:TRV) Will Be Trading Ex-Dividend

It looks like The Travelers Companies, Inc. (NYSE:TRV) is about to go ex-dividend in the next three days. You will need to purchase shares before the 9th of March to receive the dividend, which will be paid on the 31st of March.

Travelers Companies's next dividend payment will be US$0.85 per share, and in the last 12 months, the company paid a total of US$3.40 per share. Calculating the last year's worth of payments shows that Travelers Companies has a trailing yield of 2.3% on the current share price of $149.02. 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! As a result, readers should always check whether Travelers Companies has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Travelers Companies

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Travelers Companies's payout ratio is modest, at just 32% 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.

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 fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Travelers Companies's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Travelers Companies has delivered an average of 9.0% per year annual increase in its dividend, based on the past 10 years of dividend payments.

Final Takeaway

Has Travelers Companies got what it takes to maintain its dividend payments? Travelers Companies's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Travelers Companies, it's worth knowing the risks this business faces. For example, we've found 1 warning sign for Travelers Companies that we recommend you consider before investing in the business.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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