Global Indemnity Group (NASDAQ: GBLI) to pay dividend of US $ 0.25

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Global Compensation Group, LLC (NASDAQ: GBLI) announced that it will pay a dividend of US $ 0.25 per share on December 31. This makes the dividend yield of 3.8%, which will increase investor returns quite well.

See our latest analysis for Global Indemnity Group

Global Indemnity Group pays more than it earns

Impressive dividend yields are good, but it doesn’t matter much if the payouts can’t be sustained. Prior to this announcement, Global Indemnity Group’s dividend exceeded earnings, but free cash flow covered it quite comfortably. Healthy cash flows are always a positive sign, especially when they easily cover the dividend.

EPS is expected to drop 30.8% over the next 12 months if recent trends continue. If the dividend continues according to recent trends, we estimate that the payout ratio could reach 488%, which could put the dividend at risk if the company’s earnings do not improve.

NasdaqGS: GBLI Historic dividend December 9, 2021

Global Indemnity Group continues to build its track record

Looking back, the dividend has been stable, but the company has not paid a dividend for a very long time, so we cannot be sure that the dividend will remain stable in all economic environments. Payments haven’t really changed much in 4 years. It’s good to see modest dividend growth, especially with relatively stable payouts. However, the payment history is relatively short and we wouldn’t want to rely too much on this dividend.

The dividend has limited growth potential

Some investors will be eager to buy a portion of the company’s stock based on its dividend history. However, initial appearances can be deceptive. Over the past five years, it appears that Global Indemnity Group’s EPS has declined by around 31% per year. Dividend payments are likely to come under some pressure unless EPS can get out of the slump it is in.

Global Indemnity Group dividend does not appear sustainable

In summary, while it is good to see that the dividend has not been reduced, we are a little cautious about the payments from Global Indemnity Group, as there could be issues maintaining them in the future. Payments haven’t been particularly stable and we don’t see huge growth potential, but with the dividend well covered by cash flow, it could prove to be reliable in the short term. This company is not in the top bracket of income providing stocks.

Investors generally tend to favor companies with a consistent and stable dividend policy over those that operate irregularly. However, there are other things for investors to consider when analyzing the performance of stocks. As an example, we have met 3 warning signs for Global Indemnity Group you need to be aware of it, and one of them is of concern. If you are a dividend investor, you can also view our curated list of high performing dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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