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Should Swiss Re Ltd (VTX:SREN) Be Part Of Your Portfolio?

A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Swiss Re Ltd (VTX:SREN) has returned to shareholders over the past 10 years, an average dividend yield of 6.00% annually. Should it have a place in your portfolio? Let’s take a look at Swiss Re in more detail. Check out our latest analysis for Swiss Re

How I analyze a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • Is it the top 25% annual dividend yield payer?

  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

  • Has the amount of dividend per share grown over the past?

  • Is is able to pay the current rate of dividends from its earnings?

  • Will the company be able to keep paying dividend based on the future earnings growth?

SWX:SREN Historical Dividend Yield June 22nd 18
SWX:SREN Historical Dividend Yield June 22nd 18

Does Swiss Re pass our checks?

Swiss Re has a trailing twelve-month payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. In the near future, analysts are predicting a more sensible payout ratio of 59.21%, leading to a dividend yield of 6.40%. Furthermore, EPS should increase to $8.69, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

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Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Although SREN’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

In terms of its peers, Swiss Re has a yield of 5.75%, which is high for Insurance stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Swiss Re is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that 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. I’ve put together three important factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for SREN’s future growth? Take a look at our free research report of analyst consensus for SREN’s outlook.

  2. Valuation: What is SREN 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 SREN is currently mispriced by the market.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.


To help readers see pass 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.