Nasdaq
華爾街日報Global Indemnity Group (NASDAQ:GBLI) Will Pay A Dividend Of $0.35
The board of Global Indemnity Group, LLC (NASDAQ:GBLI) has announced that it will pay a dividend of $0.35 per share on the 30th of December. This means the annual payment is 5.0% of the current stock price, which is above the average for the industry.
Global Indemnity Group's Future Dividend Projections Appear Well Covered By Earnings
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Global Indemnity Group's dividend was making up a very large proportion of earnings and perhaps more concerning was that it was 1,195% of cash flows. Paying out such a high proportion of cash flows can expose the business to needing to cut the dividend if the business runs into some challenges.
The next year is set to see EPS grow by 46.0%. If the dividend continues on this path, the payout ratio could be 54% by next year, which we think can be pretty sustainable going forward.
View our latest analysis for Global Indemnity Group
Global Indemnity Group Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. Since 2017, the dividend has gone from $1.00 total annually to $1.40. This works out to be a compound annual growth rate (CAGR) of approximately 4.3% a year over that time. Global Indemnity Group hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Global Indemnity Group has been growing its earnings per share at 32% a year over the past five years. However, Global Indemnity Group isn't reinvesting a lot back into the business, so we wonder how quickly it will be able to grow in the future.
Our Thoughts On Global Indemnity Group's Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Global Indemnity Group's payments, as there could be some issues with sustaining them into the future. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We don't think Global Indemnity Group is a great stock to add to your portfolio if income is your focus.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 2 warning signs for Global Indemnity Group that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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