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

Readers hoping to buy Assurant, Inc. (NYSE:AIZ) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Ex-dividend means that investors that purchase the stock on or after the 27th of November will not receive this dividend, which will be paid on the 21st of December.

Assurant's upcoming dividend is US$0.66 a share, following on from the last 12 months, when the company distributed a total of US$2.52 per share to shareholders. Calculating the last year's worth of payments shows that Assurant has a trailing yield of 1.9% on the current share price of $133.89. If you buy this business for its dividend, you should have an idea of whether Assurant's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Assurant

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. That's why it's good to see Assurant paying out a modest 37% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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

historic-dividend

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That explains why we're not overly excited about Assurant's flat earnings 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.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Assurant has increased its dividend at approximately 15% a year on average.

The Bottom Line

Is Assurant an attractive dividend stock, or better left on the shelf? Earnings per share have been flat in recent years, although Assurant reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Assurant more closely.

While it's tempting to invest in Assurant for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 1 warning sign for Assurant you should know about.

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.

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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