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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -0.84% since the start of the year. Currently paying a dividend of $0.8 per share, the company has a dividend yield of 2.27%. In comparison, the Insurance - Life Insurance industry's yield is 0.06%, while the S&P 500's yield is 1.62%.
In terms of dividend growth, the company's current annualized dividend of $3.20 is up 4.6% from last year. Reinsurance Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.12%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Reinsurance Group's current payout ratio is 18%, meaning it paid out 18% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, RGA expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $17.87 per share, with earnings expected to increase 23.84% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, RGA is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
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 -0.84% since the start of the year. Currently paying a dividend of $0.8 per share, the company has a dividend yield of 2.27%. In comparison, the Insurance - Life Insurance industry's yield is 0.06%, while the S&P 500's yield is 1.62%.
In terms of dividend growth, the company's current annualized dividend of $3.20 is up 4.6% from last year. Reinsurance Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.12%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Reinsurance Group's current payout ratio is 18%, meaning it paid out 18% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, RGA expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $17.87 per share, with earnings expected to increase 23.84% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, RGA is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).