Yahoo Finance Primerica (NYSE:PRI) Is Increasing Its Dividend To $0.65
The board of Primerica, Inc. (NYSE:PRI) has announced that it will be paying its dividend of $0.65 on the 12th of June, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 1.5%.
View our latest analysis for Primerica
Primerica's Payment Has Solid Earnings Coverage
If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Primerica was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 91.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 14%, which is in the range that makes us comfortable with the sustainability of the dividend.
Primerica Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.20 in 2013 to the most recent total annual payment of $2.60. This means that it has been growing its distributions at 29% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
Primerica Could Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Primerica has impressed us by growing EPS at 5.5% per year over the past five years. Primerica definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Primerica's Dividend
Overall, a dividend increase is always good, and we think that Primerica is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 2 warning signs for Primerica that investors need to be conscious of moving forward. Is Primerica not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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