Universal Insurance Holdings (NYSE:UVE) shares will have an ex-dividend date in 4 days. The ex-dividend date is usually set one business day before the record date. The record date is the deadline by which you must be on the company’s books as a shareholder to receive the dividend. The record date is important because the settlement process takes two full business days, so if you miss it, you won’t be on the company’s books on the record date. In other words, investors can buy Universal Insurance Holdings shares by August 2nd to be eligible to receive the dividend paid on August 9th.
The company’s upcoming dividend is US$0.16 per share, following the company distributing a total of US$0.77 per share to shareholders over the last 12 months. Calculating the dividend over the past year, we can see that Universal Insurance Holdings has a trailing yield of 4.0% on the current share price of US$19.10. If you buy this business for its dividend, you need to know if Universal Insurance Holdings’s dividend is reliable and sustainable, so you need to check whether the dividend payments are covered, and if earnings are growing.
View our latest analysis for Universal Insurance Holdings
Dividends are typically paid out of a company’s profits. If a company pays out more in dividends than it earned, the dividend may be unsustainable. Universal Insurance Holdings pays out just 22% of its after-tax profits as dividends, which is low enough that it should be able to afford the downturn.
Generally speaking, companies that pay out less in dividends than they profit pay out more sustainable dividends, and the lower the payout ratio, the more wiggle room a company has before it is forced to cut its dividend.
You can click here to see how much of its profit Universal Insurance Holdings paid out over the last 12 months.
Historical Dividend
Are profits and dividends increasing?
Companies with declining profits pose higher risks for dividend shareholders: if profits fall and the company is forced to cut its dividend, investors could watch the value of their investment disappear, so it’s not encouraging to see that Universal Insurance Holdings’ profits have fallen 2.8% per year over the past five years.
Another key way to gauge a company’s dividend prospects is to measure the historical rate of dividend growth: Over the past decade, Universal Insurance Holdings has grown its dividend by an average of approximately 8.5% per year.
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Does Universal Insurance Holdings have the strength to sustain its dividend payments? While earnings per share have declined significantly in recent years, we like the fact that the company has a low dividend payout ratio, which could suggest that a dividend cut is not a big risk in the near future. In short, this is a mixed bag and we find it hard to get excited about the company from a dividend perspective.
However, if you’re still interested in Universal Insurance Holdings as a potential investment, you should definitely consider some of the risks associated with Universal Insurance Holdings. Our analysis shows 2 warning signs for Universal Insurance Holdings, and we strongly recommend you review these before investing in the company.
Generally speaking, we don’t recommend just buying the first dividend stock you see, so here we present a curated list of interesting stocks with high dividends.
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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.
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