Interested In Prudential Financial, Inc. (NYSE:PRU)’s Upcoming US$1.00 Dividend? You Have 2 Days Left
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If you are interested in cashing in on Prudential Financial, Inc.’s (NYSE:PRU) upcoming dividend of US$1.00 per share, you only have 2 days left to buy the shares before its ex-dividend date, 19 February 2019, in time for dividends payable on the 14 March 2019. Is this future income a persuasive enough catalyst for investors to think about Prudential Financial as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
Check out our latest analysis for Prudential Financial
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
It is paying an annual yield above 75% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It is able to pay the current rate of dividends from its earnings
It is able to continue to payout at the current rate in the future
High Yield And Dependable
Prudential Financial’s dividend yield stands at 4.3%, which is high for Insurance stocks. But the real reason Prudential Financial stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of PRU it has increased its DPS from $0.58 to $4 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
The company currently pays out 37% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect PRU’s payout to fall to 32% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 4.6%. However, EPS should increase to $12.19, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Next Steps:
Prudential Financial’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three important aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for PRU’s future growth? Take a look at our free research report of analyst consensus for PRU’s outlook.
Valuation: What is PRU worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PRU is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
