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Corebridge Financial, Inc. (NYSE:CRBG) will pay a dividend of $0.24 on the 30th of June. This means the annual payment is 3.1% of the current stock price, which is above the average for the industry.
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Corebridge Financial's Projected Earnings Seem Likely To Cover Future Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Corebridge Financial's dividend made up quite a large proportion of earnings but only 25% of free cash flows. This leaves plenty of cash for reinvestment into the business.
Looking forward, earnings per share is forecast to rise exponentially over the next year. Assuming the dividend continues along recent trends, we estimate that the payout ratio could reach 14%, which is in a comfortable range for us.
View our latest analysis for Corebridge Financial
Corebridge Financial Doesn't Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2022, the dividend has gone from $0.92 total annually to $0.96. This means that it has been growing its distributions at 1.4% per annum over that time. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
Corebridge Financial Might Find It Hard To Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Corebridge Financial has been growing its earnings per share at 74% a year over the past five years. Earnings per share is growing nicely, but the company is paying out most of its earnings as dividends. This might be sustainable, but we wonder why Corebridge Financial is not retaining those earnings to reinvest in growth.
Our Thoughts On Corebridge Financial's Dividend
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. This company is not in the top tier of income providing stocks.