Horace Mann Educators Corporation (NYSE:HMN) Pays A US$0.35 Dividend In Just Four Days

Readers hoping to buy Horace Mann Educators Corporation (NYSE:HMN) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Horace Mann Educators' shares before the 15th of December in order to receive the dividend, which the company will pay on the 31st of December.

The company's next dividend payment will be US$0.35 per share. Last year, in total, the company distributed US$1.40 to shareholders. Calculating the last year's worth of payments shows that Horace Mann Educators has a trailing yield of 3.2% on the current share price of US$44.38. If you buy this business for its dividend, you should have an idea of whether Horace Mann Educators's dividend is reliable and sustainable. As a result, readers should always check whether Horace Mann Educators has been able to grow its dividends, or if the dividend might be cut.

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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. Horace Mann Educators paid out a comfortable 35% of its profit last year.

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.

See our latest analysis for Horace Mann Educators

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Horace Mann Educators's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Horace Mann Educators has delivered 3.4% dividend growth per year on average over the past 10 years.

To Sum It Up

Has Horace Mann Educators got what it takes to maintain its dividend payments? Horace Mann Educators's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

If you want to look further into Horace Mann Educators, it's worth knowing the risks this business faces. For example - Horace Mann Educators has 1 warning sign we think you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.