Assessing Dividend Sustainability, Yield, and Growth of Chubb Ltd (CB, Financial)
Chubb Ltd (CB) recently announced a dividend of $0.86 per share, payable on 2023-10-06, with the ex-dividend date set for 2023-09-14. As investors anticipate this forthcoming payment, the focus also shifts towards the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's delve deeper into Chubb Ltd's dividend performance and evaluate its sustainability.
Understanding Chubb Ltd's Business Model
ACE acquired Chubb in the first quarter of 2016 and assumed the Chubb name. The merger transformed the new Chubb into one of the largest domestic property and casualty insurers, with operations spanning across 54 countries and encompassing commercial and personal P&C insurance, reinsurance, and life insurance.
Exploring Chubb Ltd's Dividend History
Chubb Ltd has upheld a consistent dividend payment record since 1993, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1994, earning it the prestigious title of a dividend aristocrat. This honor is bestowed upon companies that have consistently increased their dividend each year for at least the past 29 years.
Assessing Chubb Ltd's Dividend Yield and Growth
As of today, Chubb Ltd has a 12-month trailing dividend yield of 1.60% and a 12-month forward dividend yield of 1.64%, indicating an expected increase in dividend payments over the next 12 months.
Over the past three years, Chubb Ltd's annual dividend growth rate was 3.40%. When extended to a five-year horizon, this rate decreased to 3.10% per year. Over the past decade, Chubb Ltd's annual dividends per share growth rate stands at 4.40%.
Evaluating Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio offers 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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Chubb Ltd's dividend payout ratio is 0.24.
Chubb Ltd's profitability rank is 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Inspecting Growth Metrics for Future Outlook
Chubb Ltd's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a robust revenue model, with revenue increasing by approximately 10.90% per year on average. This rate outperforms approximately 75.11% 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, Chubb Ltd's earnings increased by approximately 8.90% per year on average, a rate that outperforms approximately 60.11% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.30% outperforms approximately 72.54% of global competitors.
Conclusion
Chubb Ltd's consistent dividend payments, growth rate, and low payout ratio, coupled with its high profitability and robust growth metrics, indicate a promising outlook for the company. These factors suggest that Chubb Ltd is well-positioned to sustain its dividends in the long term, making it an attractive option for dividend-focused investors.
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