Readers hoping to buy Reinsurance Group of America, Incorporated (NYSE:RGA) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase Reinsurance Group of America's shares before the 12th of November in order to be eligible for the dividend, which will be paid on the 26th of November.

The company's next dividend payment will be US$0.89 per share. Last year, in total, the company distributed US$3.56 to shareholders. Calculating the last year's worth of payments shows that Reinsurance Group of America has a trailing yield of 1.6% on the current share price of US$227.66. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Reinsurance Group of America can afford its dividend, and if the dividend could grow.

View our latest analysis for Reinsurance Group of America

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Reinsurance Group of America's payout ratio is modest, at just 31% of profit.

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?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. It's not encouraging to see that Reinsurance Group of America's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Reinsurance Group of America has lifted its dividend by approximately 11% a year on average.

To Sum It Up

Is Reinsurance Group of America an attractive dividend stock, or better left on the shelf? Reinsurance Group of America's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. We're unconvinced on the company's merits, and think there might be better opportunities out there.

With that being said, if dividends aren't your biggest concern with Reinsurance Group of America, you should know about the other risks facing this business. Every company has risks, and we've spotted 1 warning sign for Reinsurance Group of America you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.