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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Jackson Financial Inc. (NYSE:JXN) is about to trade ex-dividend in the next 4 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Jackson Financial's shares before the 1st of June in order to receive the dividend, which the company will pay on the 16th of June.
The company's next dividend payment will be US$0.55 per share, on the back of last year when the company paid a total of US$2.20 to shareholders. Looking at the last 12 months of distributions, Jackson Financial has a trailing yield of approximately 6.3% on its current stock price of $34.91. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Jackson Financial has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Jackson Financial
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Jackson Financial paid out just 4.2% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend.
Given that Jackson Financial has only been paying a dividend for a year, there's not much of a past history to draw insight from.
To Sum It Up
Should investors buy Jackson Financial for the upcoming dividend? Companies like Jackson Financial that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Jackson Financial ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.