There's A Lot To Like About Reinsurance Group of America's (NYSE:RGA) Upcoming US$0.93 Dividend

Reinsurance Group of America, Incorporated (NYSE:RGA) stock is about to trade ex-dividend in four days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Reinsurance Group of America's shares before the 17th of February to receive the dividend, which will be paid on the 3rd of March.

The company's next dividend payment will be US$0.93 per share. Last year, in total, the company distributed US$3.72 to shareholders. Based on the last year's worth of payments, Reinsurance Group of America has a trailing yield of 1.7% on the current stock price of US$220.70. If you buy this business for its dividend, you should have an idea of whether Reinsurance Group of America's dividend is reliable and sustainable. So we need to investigate whether Reinsurance Group of America can afford its dividend, and if the dividend could grow.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Reinsurance Group of America paid out a comfortable 27% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

View our latest analysis for Reinsurance Group of America

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Reinsurance Group of America's earnings per share have been growing at 16% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Reinsurance Group of America has increased its dividend at approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Has Reinsurance Group of America got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Reinsurance Group of America more closely.

Wondering what the future holds for Reinsurance Group of America? See what the seven analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.