Yahoo Finance Aegon Ltd's Dividend Analysis
Exploring the Sustainability and Growth Prospects of Aegon Ltd's Dividends
Aegon Ltd (NYSE:AEG) recently announced a dividend of $0.17 per share, payable on July 8, 2024, with the ex-dividend date set for June 17, 2024. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Aegon Ltd's dividend performance and assess its sustainability.
What Does Aegon Ltd Do?
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Aegon is a life insurance and long-term savings company based in the Netherlands, listed on the Amsterdam Stock Exchange since the 1980s. It has mature operations in the United States, United Kingdom, and four growth markets including Brazil, China, Portugal, and Spain. Over recent years, Aegon has been undergoing a substantial transformation program, divesting non-core operations and improving the risk profile by separating the company into strategic and financial assets. This strategy aims to transition from capital-intensive and volatile earnings products to more capital-light and predictable strategic businesses.
A Glimpse at Aegon Ltd's Dividend History
Aegon Ltd has maintained a consistent dividend payment record since 2012, with dividends currently distributed on a bi-annual basis. Below is a chart showing the annual Dividends Per Share to track historical trends.
Breaking Down Aegon Ltd's Dividend Yield and Growth
As of today, Aegon Ltd currently boasts a 12-month trailing dividend yield of 4.55% and a 12-month forward dividend yield of 5.60%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Aegon Ltd's annual dividend growth rate was 63.00%. However, extended to a five-year horizon, this rate decreased to -2.10% per year, and over the past decade, the annual dividends per share growth rate stands at -3.50%. Based on Aegon Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Aegon Ltd stock as of today is approximately 4.09%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of December 31, 2023, Aegon Ltd's dividend payout ratio is 0.00. Aegon Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aegon Ltd's profitability 4 out of 10 as of December 31, 2023, suggesting the dividend may not be sustainable. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Aegon Ltd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Aegon Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aegon Ltd's revenue has increased by approximately -4.30% per year on average, a rate that underperforms approximately 76.94% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Aegon Ltd's earnings increased by approximately 21.90% per year on average, a rate that underperforms approximately 32.68% of global competitors.
Conclusion
In conclusion, while Aegon Ltd has demonstrated a commitment to paying dividends, the sustainability of these payments is questionable given the company's low profitability and growth metrics. Investors should closely monitor the developments in Aegon Ltd's strategic initiatives and financial health to make informed decisions about the potential risks and rewards of investing in its dividends. For more detailed analysis and to explore other high-dividend yield opportunities, consider using the High Dividend Yield Screener available to GuruFocus Premium users.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
