Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Reinsurance Group of America, Incorporated (NYSE:RGA) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. In other words, investors can purchase Reinsurance Group of America's shares before the 13th of May in order to be eligible for the dividend, which will be paid on the 27th of May.

The company's next dividend payment will be US$0.89 per share, and in the last 12 months, the company paid a total of US$3.56 per share. Based on the last year's worth of payments, Reinsurance Group of America stock has a trailing yield of around 1.8% on the current share price of US$202.06. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

We check all companies for important risks. See what we found for Reinsurance Group of America in our free report.

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Reinsurance Group of America paying out a modest 29% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for Reinsurance Group of America

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.NYSE:RGA Historic Dividend May 9th 2025

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. So we're not too excited that Reinsurance Group of America's earnings are down 2.9% a year over the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Reinsurance Group of America has delivered 10% dividend growth per year on average over the past 10 years.

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The Bottom Line

From a dividend perspective, should investors buy or avoid Reinsurance Group of America? Reinsurance Group of America's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

Wondering what the future holds for Reinsurance Group of America? See what the eight analysts we track are forecasting,  with this visualisation of its historical and future estimated earnings and cash flow

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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