Yahoo Finance Dividend Hunters Should Consider Zurich Insurance Group AG (VTX:ZURN), With A 5.7% Yield
If you are an income investor, then Zurich Insurance Group AG (VTX:ZURN) should be on your radar. Zurich Insurance Group AG, together with its subsidiaries, provides insurance products and related services in Europe, North America, Latin America, and the Asia Pacific. Over the past 10 years, the CHF46.8b market cap company has been growing its dividend payments, from $12.25 to $17.87. Currently yielding 5.7%, let’s take a closer look at Zurich Insurance Group’s dividend profile.
See our latest analysis for Zurich Insurance Group
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
It is paying an annual yield above 75% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It can afford to pay the current rate of dividends from its earnings
It is able to continue to payout at the current rate in the future
High Yield And Dependable
Zurich Insurance Group currently yields 5.7%, which is high for Insurance stocks. But the real reason Zurich Insurance Group stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of ZURN it has increased its DPS from $12.25 to $17.87 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
The company currently pays out 84% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 71%, leading to a dividend yield of around 6.5%. However, EPS should increase to $25.95, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Next Steps:
With Zurich Insurance Group producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three important factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for ZURN’s future growth? Take a look at our free research report of analyst consensus for ZURN’s outlook.
Valuation: What is ZURN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ZURN is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
