Some investors rely on dividends to grow their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that Hartford Financial Services Group, Inc. (NYSE: HIG) is set to be ex-dividend in just four days. The ex-dividend date is a business day before a company’s registration date, which is the date the company determines which shareholders are entitled to receive a dividend. It is important to know the ex-dividend date because any transaction in the share must have been settled by the registration date at the latest. This means that investors who buy Hartford Financial Services Group shares on or after November 30 will not receive the dividend, which will be paid on January 4.
The company’s next dividend payment will be US $ 0.39 per share. Last year, in total, the company distributed US $ 1.54 to shareholders. Last year’s total dividend payouts show Hartford Financial Services Group has a 2.2% return on the current share price of $ 71.52. If you are buying this company for its dividend, you should know if the Hartford Financial Services Group dividend is reliable and sustainable. So we need to determine whether Hartford Financial Services Group can afford its dividend and whether the dividend could increase.
Dividends are usually paid out of business income, so if a business pays more than it earned, its dividend is usually at risk of being reduced. Hartford Financial Services Group paid only 23% of its profits last year, which in our opinion is moderately low and leaves plenty of room for unforeseen circumstances.
When a company has paid less dividends than it made a profit, it usually suggests that its dividend is affordable. The lower the% of its profit that it pays out, the greater the margin of safety for the dividend if the company goes into recession.
NYSE: HIG Historical Dividend November 25, 2021
Have profits and dividends increased?
Companies with strong growth prospects generally make the best dividend payers because dividends are easier to grow when earnings per share improve. If profits fall enough, the company could be forced to cut its dividend. Luckily for readers, Hartford Financial Services Group’s earnings per share have grown 17% annually over the past five years.
Most investors will primarily assess a company’s dividend prospects by checking the historical rate of dividend growth. Over the past 10 years, Hartford Financial Services Group has increased its dividend by around 14% per year on average. It’s great to see earnings per share increasing rapidly over several years, and dividends per share increasing at the same time.
Is Hartford Financial Services Group an attractive dividend-paying stock, or better still, is it being left out? Companies like Hartford Financial Services Group, which are growing rapidly and paying only a small fraction of the profits, typically reinvest heavily in their business. This strategy can bring significant added value to shareholders over the long term, provided it is applied without issuing too many new shares. Overall, Hartford Financial Services Group appears to be a promising dividend-paying stock in this analysis, and we think it would be worth studying further.
On that note, you’ll want to research the risks Hartford Financial Services Group faces. In terms of investment risks, we have identified 1 warning sign with Hartford Financial Services Group and understanding them should be part of your investment process.
A common investment mistake is to buy the first interesting stock you see. Here you can find a list of promising dividend stocks with a yield above 2% and a future dividend.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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