Jackson Financial Inc. (NYSE:JXN) is set to increase its dividend from the previous year’s payment for this period to $0.80 on the 20th of March. This adjustment will elevate the dividend yield to an enticing 3.9%, enhancing returns for shareholders.
Check out our most recent analysis of Jackson Financial
While a high yield for a few years may not hold much significance if the payments aren’t stable, Jackson Financial’s dividend has previously been well supported by both cash flow and earnings before this announcement. This indicates that a substantial portion of the company’s earnings is being reinvested for growth.
In the coming year, earnings per share (EPS) is projected to decline by 2.0%. If the dividend maintains its recent trajectory, we estimate the payout ratio could reach 24%, placing the company in a solid position to sustain this in the future.
Although the dividend has not experienced significant cuts in the past, the company has only been distributing dividends for the last 3 years, which is relatively short in the broader context. The annual payments over the previous three years included $2.00 in 2022 and a recent fiscal year payment of $3.20. This translates to a compound annual growth rate (CAGR) of around 17% annually during that timeframe. While we remain somewhat cautious about the brief history of dividend payments, the growth rate is promising, and we might take a closer look.
Shareholders who have retained their investments over the last few years will likely appreciate the dividend income received. Jackson Financial has notably increased its EPS by 11% annually over the last five years. The company clearly holds potential for future dividend growth, particularly with earnings on the rise and a low payout ratio.
In conclusion, we believe this could be an appealing income stock, further bolstered by the higher dividend this year. The distributions are well-supported by earnings, and the firm is generating ample cash. However, it’s important to recognize the expected decline in earnings over the next year, which may not alter the long-term outlook but could impact the dividend payments in the upcoming 12 months. Considering all factors, this appears to be a promising dividend opportunity.
Typically, investors favor companies with a consistent and stable dividend policy over those with irregular distributions. However, it’s crucial to evaluate an array of other factors beyond just dividend payments when assessing a company. For instance, we’ve identified 1 warning sign for Jackson Financial that investors should consider before investing in this stock. Not quite sure Jackson Financial is the right opportunity for you? Explore our collection of top dividend stocks.
Do you have feedback on this article? Concerned about the content? Reach out to us directly. Alternatively, you can email editorial-team (at) simplywallst.com.
This article by Simply Wall St is intended for general informational purposes. We provide insights based on historical data and analyst forecasts through an unbiased methodology, and our articles should not be interpreted as financial advice. They do not constitute a recommendation to buy or sell any stocks and do not consider your objectives or financial situation. We strive to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not incorporate the latest price-sensitive company announcements or qualitative material. Simply Wall St holds no positions in any stocks mentioned.
