The Hartford Financial Services Group, Inc. (NYSE:HIG) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

The Hartford Financial Services Group, Inc. (NYSE:HIG) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 28th of February will not receive the dividend, which will be paid on the 2nd of April.

Hartford Financial Services Group's next dividend payment will be US$0.33 per share, on the back of last year when the company paid a total of US$1.30 to shareholders. Based on the last year's worth of payments, Hartford Financial Services Group stock has a trailing yield of around 2.2% on the current share price of $58.05. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Hartford Financial Services Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hartford Financial Services Group is paying out just 21% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

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.

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Hartford Financial Services Group's earnings per share have been growing at 13% a year for 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. Since the start of our data, ten years ago, Hartford Financial Services Group has lifted its dividend by approximately 21% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Should investors buy Hartford Financial Services Group for the upcoming dividend? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Hartford Financial Services Group looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

Curious what other investors think of Hartford Financial Services Group? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.