Yahoo Finance Lincoln National Corp's Dividend Analysis
An In-Depth Look at Lincoln National Corp's Dividend Sustainability and Growth
Lincoln National Corp (NYSE:LNC) recently announced a dividend of $0.45 per share, payable on 2024-05-01, with the ex-dividend date set for 2024-04-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Lincoln National Corp's dividend performance and assess its sustainability.
What Does Lincoln National Corp Do?
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Lincoln National Corp operates multiple insurance and retirement businesses. The company's operating segments include Annuities; Retirement Plan Services; Life Insurance and Group Protection. Its products primarily include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance (VUL), linked-benefit UL and VUL, indexed universal life insurance (IUL), term life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.
A Glimpse at Lincoln National Corp's Dividend History
Lincoln National Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Lincoln National Corp has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 15 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Lincoln National Corp's Dividend Yield and Growth
As of today, Lincoln National Corp currently has a 12-month trailing dividend yield of 5.86% and a 12-month forward dividend yield of 5.86%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Lincoln National Corp's annual dividend growth rate was 3.60%. Extended to a five-year horizon, this rate increased to 5.80% per year. And over the past decade, Lincoln National Corp's annual dividends per share growth rate stands at an impressive 12.90%.
Based on Lincoln National Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Lincoln National Corp stock as of today is approximately 7.77%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate 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 2023-12-31, Lincoln National Corp's dividend payout ratio is 0.00.
Lincoln National Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Lincoln National Corp's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 9 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. Lincoln National Corp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Lincoln National Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Lincoln National Corp's revenue has increased by approximately -8.80% per year on average, a rate that underperforms than approximately 83.09% 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, Lincoln National Corp's earnings increased by approximately 25.60% per year on average, a rate that underperforms than approximately 26.29% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.90%, which underperforms than approximately 48.16% of global competitors.
Next Steps
Considering Lincoln National Corp's consistent dividend payments, moderate dividend growth rate, low payout ratio, and fair profitability and growth metrics, investors may find the stock a compelling choice for income portfolios. However, the company's underperformance in revenue and earnings growth compared to global competitors suggests a need for cautious optimism and further analysis. Value investors should weigh these factors alongside their investment strategies and consider the potential for future growth and sustainability of dividends. As always, staying informed about industry trends, regulatory factors, and the company's strategic initiatives will be key to making an informed decision. Will Lincoln National Corp continue its dividend achiever status in the years to come? Only time will tell.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
