Don't Buy James River Group Holdings, Ltd. (NASDAQ:JRVR) For Its Next Dividend Without Doing These Checks

Readers hoping to buy James River Group Holdings, Ltd. (NASDAQ:JRVR) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You can purchase shares before the 11th of September in order to receive the dividend, which the company will pay on the 30th of September.

James River Group Holdings's upcoming dividend is US$0.30 a share, following on from the last 12 months, when the company distributed a total of US$1.20 per share to shareholders. Calculating the last year's worth of payments shows that James River Group Holdings has a trailing yield of 2.5% on the current share price of $47.73. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether James River Group Holdings can afford its dividend, and if the dividend could grow.

See our latest analysis for James River Group Holdings

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. James River Group Holdings paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run.

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

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Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. James River Group Holdings reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. James River Group Holdings has delivered 11% dividend growth per year on average over the past six years.

We update our analysis on James River Group Holdings every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Is James River Group Holdings an attractive dividend stock, or better left on the shelf? It's hard to get past the idea of James River Group Holdings paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. All things considered, we're not optimistic about its dividend prospects, and would be inclined to leave it on the shelf for now.

So if you're still interested in James River Group Holdings despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. To help with this, we've discovered 2 warning signs for James River Group Holdings that you should be aware of before investing in their shares.

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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