Only Three Days Left To Cash In On MetLife's (NYSE:MET) Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see MetLife, Inc. (NYSE:MET) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. This means that investors who purchase MetLife's shares on or after the 3rd of November will not receive the dividend, which will be paid on the 8th of December.
The company's upcoming dividend is US$0.5925 a share, following on from the last 12 months, when the company distributed a total of US$2.37 per share to shareholders. Calculating the last year's worth of payments shows that MetLife has a trailing yield of 2.4% on the current share price of US$100.83. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether MetLife has been able to grow its dividends, or if the dividend might be cut.
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. MetLife paid out a comfortable 44% of its profit last year.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
View our latest analysis for MetLife
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about MetLife's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. MetLife has delivered 4.7% dividend growth per year on average over the past 10 years.
To Sum It Up
Should investors buy MetLife for the upcoming dividend? MetLife's earnings per share are basically flat over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.
However if you're still interested in MetLife as a potential investment, you should definitely consider some of the risks involved with MetLife. To help with this, we've discovered 1 warning sign for MetLife that you should be aware of before investing in their shares.
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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