Unraveling the Dividend History, Yield, and Sustainability of AIG's Dividend Payments
Recently, American International Group Inc (AIG, Financial) announced a dividend of $0.36 per share, payable on 2023-09-29 with the ex-dividend date set for 2023-09-14. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into American International Group Inc's dividend performance and assess its sustainability.
About American International Group Inc
American International Group is one of the world's largest insurance and financial services firms with a global footprint. It operates through various subsidiaries that provide property, casualty, and life insurance. The company recently spun off its life insurance operations (Corebridge) but still retains a majority stake.
American International Group Inc's Dividend History
American International Group Inc has maintained a consistent dividend payment record since 2013, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2013, earning it the status of a dividend achiever. This honor is given to companies that have increased their dividend each year for at least the past 10 years.
Understanding American International Group Inc's Dividend Yield and Growth
Currently, American International Group Inc has a 12-month trailing dividend yield of 2.18% and a 12-month forward dividend yield of 2.39%. This suggests an expectation of increased dividend payments over the next 12 months. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of American International Group Inc stock as of today is approximately 2.18%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
Assessing the sustainability of the dividend requires evaluating 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 2023-06-30, American International Group Inc's dividend payout ratio is 0.20.
American International Group Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks American International Group Inc's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. 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. American International Group Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Additionally, the company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. American International Group Inc's revenue has increased by approximately 8.60% per year on average, outperforming approximately 66.59% 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, American International Group Inc's earnings increased by approximately 52.20% per year on average, outperforming approximately 92.08% of global competitors.
Concluding Thoughts
In conclusion, American International Group Inc's consistent dividend payments, impressive growth rate, low payout ratio, fair profitability, and strong growth metrics demonstrate its potential for sustained dividends. However, investors must continue to monitor these factors to ensure the company's continued ability to maintain and potentially increase its dividend payments. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
