Opinions of the company Safety Insurance Group, Inc. (NASDAQ:SAFT) will pay a dividend of $0.90 on September 15, 2019. The dividend yield will be 4.0% based on this dividend which is still above the industry average.
Check out our latest analysis of Safety Insurance Group
Benefits of Group Security Insurance Easily Cover Dividends
Big gains over the years don’t mean much if they aren’t possible. Prior to this announcement, the Security Insurance Group segment made up a large portion of its revenue but only 49% of free cash flow. In most cases, cash flow is more important than earnings, so we are confident that the sector will be stable in the future, especially with a large amount of cash left for reinvestment.
Next year, EPS could grow by 3.3% if current trends continue. If the sector continues on this path, the payout ratio could reach 74% by next year, which we think will be stable going forward.
The Security Insurance Group Has A Stable Track Record
Despite the long period of dividend payouts, the company’s distributions have been remarkably stable. From 2012, the salary has gone from $2.00 per year to $3.60. This means that the company grew its annual dividend by about 6.1% during that period. This sector has been growing very well for several years, and has given shareholders good returns on their shares.
Group size can be hard to come by
Investors may be attracted to the stock based on its payment history. However, Safety Insurance Group has only grown its earnings per share by 3.3% annually over the past five years. Safety Insurance Group’s earnings per share have grown at a slower pace, which isn’t good — perhaps that’s why the company pays more of its dividends to shareholders. When a company prefers to pay out cash to shareholders rather than returns, this can say a lot about how the company will be distributed.
We really like Safety Insurance Group’s dividend
In short, it’s good to see that profits are stable, and we don’t think there’s any reason to doubt that this will change in the short term. Earnings easily hide dividends, and the company is making a lot of money. When all these factors are considered, we think this has strong potential as a distribution unit.
It is important to note that companies with decentralized distribution policies create more business confidence than those with a fixed distribution policy. Meanwhile, despite the importance of dividend payments, it is not the only thing our readers should know when evaluating a company. For example, we have chosen 2 Safety Insurance Group warning signs which investors should consider. If you are a parts dealer, you may also want to check out ours a list of high yield shares.
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This article by Simply Wall St is more general in nature. We provide reviews based on historical data and expert forecasts using unbiased methods and our articles are not intended to be financial advice. It does not make recommendations to buy or sell any stock, and does not take into account your goals, or your financial situation. We want to bring you long-term analytics driven by meaningful data. Note that our analysis may not be influenced by recent company announcements or stock prices. Simply Wall St does not have a position in any of the listed stocks.