Great-West Lifeco Inc. (TSE:GWO) will have an ex-dividend date in the next 4 days. The ex-dividend date is one business day before the company’s record date. The record date is the date the company determines which shareholders are entitled to receive dividends. The ex-dividend date is important because in order to receive the dividend, the stock transaction must have settled before the record date. This means that investors who buy Great-West Lifeco shares after August 30th will not be able to receive the dividend paid on September 27th.
The company’s next dividend will be C$0.555 per share, on top of the total of C$2.22 paid to shareholders last year. Based on last year’s dividends, Great-West Lifeco shares have a historical yield of 5.1% on the current share price of C$43.59. If you buy this company for its dividend, you should know if Great-West Lifeco’s dividends are reliable and sustainable. Therefore, readers should always check whether Great-West Lifeco has managed to grow its dividends, or whether the dividend might be cut.
Check out our latest analysis for Great-West Lifeco
Dividends are typically paid out of company profits, so if a company pays out more than it earned, it is at a higher risk of its dividend being cut than usual. Great-West Lifeco paid out more than half (54%) of its profits last year, which is a standard payout ratio for most companies.
Generally speaking, the lower a company’s dividend payout ratio, the more stable its dividend tends to be.
Click here to see the company’s dividend payout ratio, plus analyst estimates of its future dividends.
Historical Dividend
Are profits and dividends increasing?
Companies with growth prospects are usually the best suited to paying dividends, as it is easier to grow dividends when earnings per share are improving. If business slows and the dividend is cut, the company’s value could plummet. So it’s reassuring to see that Great-West Lifeco’s earnings per share have grown at 5.9% per year over the past five years.
Many investors assess a company’s dividend performance by evaluating how much the dividend has changed over time. Based on the past 10 years of dividend payments, Great-West Lifeco has managed to grow its dividend at an average of 6.1% per year. It’s encouraging to see the company raising its dividend amid growing earnings, suggesting that the company at least has some interest in rewarding shareholders.
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Final conclusion
From a dividend perspective, should investors buy or avoid Great-West Lifeco? Great-West Lifeco has managed to grow earnings per share at a moderate rate while paying out more than half of its profits to shareholders in the form of dividends. In short, this is a mixed bag, making it hard to get excited about the company from a dividend perspective.
Want to know what other investors think about Great-West Lifeco? Check out analyst forecasts by visualising its historical and future estimated earnings and cash flows.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.