A comprehensive look at the company's dividend history, yield, growth rates, and future prospects
Axis Capital Holdings Ltd (AXS, Financial) recently announced a dividend of $0.44 per share, scheduled for payment on October 18, 2023, with an ex-dividend date set for September 29, 2023. As investors anticipate this forthcoming payment, attention is also drawn to the company's dividend history, yield, and growth rates. This article uses GuruFocus data to delve into Axis Capital Holdings Ltd's dividend performance and evaluate its sustainability.
Understanding Axis Capital Holdings Ltd
Axis Capital Holdings Ltd is a property and casualty insurance company that offers a variety of products and services to clients and distribution partners. The company operates subsidiaries and branch networks in Bermuda, the United States, Canada, Europe, and Singapore. Its business comprises two distinct global underwriting platforms: AXIS Insurance and AXIS Reinsurance. The company manages its portfolio holistically, aiming to construct an optimal consolidated portfolio of funded and unfunded risks.
A Dive into Axis Capital Holdings Ltd's Dividend History
Axis Capital Holdings Ltd has maintained a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2003, earning it the status of a dividend achiever - a title bestowed on companies that have increased their dividend each year for at least the past 20 years. The chart below shows the annual Dividends Per Share for tracking historical trends.
Examining Axis Capital Holdings Ltd's Dividend Yield and Growth
As of today, Axis Capital Holdings Ltd has a 12-month trailing dividend yield of 3.02% and a 12-month forward dividend yield of 3.04%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Axis Capital Holdings Ltd's annual dividend growth rate was 2.40%. This rate increased to 2.50% per year over a five-year horizon. Over the past decade, the company's annual dividends per share growth rate stands at 6.40%. Based on Axis Capital Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Axis Capital Holdings Ltd stock as of today is approximately 3.42%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To determine the sustainability of the dividend, it's crucial to examine the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of June 30, 2023, Axis Capital Holdings Ltd's dividend payout ratio is 0.44. Axis Capital Holdings Ltd's profitability rank of 5 out of 10, as of June 30, 2023, suggests fair profitability. The company has reported net profit in 8 years out of the past 10 years.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Axis Capital Holdings Ltd's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Axis Capital Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The company's revenue has increased by approximately 0.30% per year on average, a rate that underperforms approximately 66.74% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Axis Capital Holdings Ltd's earnings increased by approximately -12.30% per year on average, a rate that underperforms approximately 74.8% of global competitors.
Concluding Thoughts
Axis Capital Holdings Ltd's consistent dividend payments, growth rate, and fair payout ratio indicate a commitment to rewarding shareholders. However, the company's profitability and growth metrics suggest a need for improvement to ensure the sustainability of dividends in the long run. As always, investors are advised to conduct thorough research and consider multiple factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
