Readers hoping to buy American National Group, Inc. (NASDAQ:ANAT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You will need to purchase shares before the 4th of September to receive the dividend, which will be paid on the 18th of September.
American National Group's next dividend payment will be US$0.82 per share, and in the last 12 months, the company paid a total of US$3.28 per share. Based on the last year's worth of payments, American National Group stock has a trailing yield of around 4.4% on the current share price of $75.33. If you buy this business for its dividend, you should have an idea of whether American National Group's dividend is reliable and sustainable. As a result, readers should always check whether American National Group has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for American National Group
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. American National Group is paying out an acceptable 62% of its profit, a common payout level among most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit American National Group paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. American National Group's earnings per share have fallen at approximately 10% a year over the previous five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, American National Group has lifted its dividend by approximately 0.6% a year on average.
The Bottom Line
Is American National Group worth buying for its dividend? We're not overly enthused to see American National Group's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.