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E-L Financial's (TSE:ELF) Dividend Is Being Reduced To CA$0.04

Simply Wall St · 05/27 10:10

E-L Financial Corporation Limited (TSE:ELF) has announced that on 17th of July, it will be paying a dividend ofCA$0.04, which a reduction from last year's comparable dividend. Based on this payment, the dividend yield will be 1.0%, which is lower than the average for the industry.

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E-L Financial's Projected Earnings Seem Likely To Cover Future Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, E-L Financial's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 23.2% if recent trends continue. If the dividend continues on this path, the payout ratio could be 50% by next year, which we think can be pretty sustainable going forward.

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TSX:ELF Historic Dividend May 27th 2025

View our latest analysis for E-L Financial

E-L Financial Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was CA$0.50 in 2015, and the most recent fiscal year payment was CA$15.00. This implies that the company grew its distributions at a yearly rate of about 41% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. E-L Financial has seen EPS rising for the last five years, at 23% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like E-L Financial's Dividend

In general, we don't like to see the dividend being cut, especially when the company has such high potential like E-L Financial does. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in E-L Financial in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.