Assessing the Sustainability of Everest Group Ltd's Dividend
Everest Group Ltd (EG, Financial) recently announced a dividend of $1.75 per share, payable on 2024-03-27, with the ex-dividend date set for 2024-03-18. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Everest Group Ltd's dividend performance and assess its sustainability.
What Does Everest Group Ltd Do?
Everest Group Ltd is engaged in providing insurance services in the U.S., Bermuda, and international markets. It operates in Reinsurance and Insurance business segments. The Reinsurance operation writes property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers, and general agents within the U.S., Bermuda, Canada, Europe, and South America.
A Glimpse at Everest Group Ltd's Dividend History
Everest Group Ltd has maintained a consistent dividend payment record since 1995. Dividends are currently distributed on a quarterly basis.
Everest Group Ltd has increased its dividend each year since 1995. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 29 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Everest Group Ltd's Dividend Yield and Growth
As of today, Everest Group Ltd currently has a 12-month trailing dividend yield of 1.73% and a 12-month forward dividend yield of 1.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Everest Group Ltd's annual dividend growth rate was 3.10%. Extended to a five-year horizon, this rate increased to 4.70% per year. And over the past decade, Everest Group Ltd's annual dividends per share growth rate stands at 10.00%.
Based on Everest Group Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Everest Group Ltd stock as of today is approximately 2.18%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate 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, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Everest Group Ltd's dividend payout ratio is 0.12.
Everest Group Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Everest Group Ltd's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Everest Group Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Everest Group Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Everest Group Ltd's revenue has increased by approximately 13.40% per year on average, a rate that outperforms approximately 76.82% 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, Everest Group Ltd's earnings increased by approximately 67.60% per year on average, a rate that outperforms approximately 92.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 58.60%, which outperforms approximately 97% of global competitors, demonstrates the company's efficiency in generating earnings before interest, taxes, depreciation, and amortization.
Engaging Conclusion: Dividend Sustainability and Growth Prospects
In conclusion, Everest Group Ltd's consistent dividend growth, prudent payout ratio, and robust profitability and growth metrics paint a picture of a company committed to rewarding shareholders while maintaining a strong financial foundation. The company's ability to outperform a significant percentage of its global competitors in revenue and earnings growth further solidifies its position as a potentially attractive choice for dividend investors. As value investors seek to make informed financial decisions, Everest Group Ltd's dividend prospects appear promising. Will Everest Group Ltd continue its trend of dividend growth, and what impact will future industry and economic trends have on its ability to sustain and grow its dividends?
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
