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Reinsurance Group (RGA) is a Top Dividend Stock Right Now: Should You Buy?
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Reinsurance Group in Focus
Reinsurance Group (RGA - Free Report) is headquartered in Chesterfield, and is in the Finance sector. The stock has seen a price change of 3.12% since the start of the year. The reinsurance company is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.18%. This compares to the Insurance - Life Insurance industry's yield of 0.09% and the S&P 500's yield of 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.20 is up 4.6% from last year. Over the last 5 years, Reinsurance Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8.24%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Reinsurance Group's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
RGA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $15.91 per share, representing a year-over-year earnings growth rate of 10.26%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that RGA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Reinsurance Group (RGA) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Reinsurance Group in Focus
Reinsurance Group (RGA - Free Report) is headquartered in Chesterfield, and is in the Finance sector. The stock has seen a price change of 3.12% since the start of the year. The reinsurance company is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.18%. This compares to the Insurance - Life Insurance industry's yield of 0.09% and the S&P 500's yield of 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $3.20 is up 4.6% from last year. Over the last 5 years, Reinsurance Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 8.24%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Reinsurance Group's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
RGA is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $15.91 per share, representing a year-over-year earnings growth rate of 10.26%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that RGA is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).