Advertisement

Marsh & McLennan Companies, Inc. (NYSE:MMC) Goes Ex-Dividend In 4 Days

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Marsh & McLennan Companies, Inc. (NYSE:MMC) is about to go ex-dividend in just 4 days. You will need to purchase shares before the 7th of April to receive the dividend, which will be paid on the 15th of May.

Marsh & McLennan Companies's upcoming dividend is US$0.46 a share, following on from the last 12 months, when the company distributed a total of US$1.82 per share to shareholders. Last year's total dividend payments show that Marsh & McLennan Companies has a trailing yield of 2.2% on the current share price of $82.02. 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.

View our latest analysis for Marsh & McLennan Companies

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Marsh & McLennan Companies paid out more than half (51%) of its earnings last year, which is a regular payout ratio for most companies.

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.

NYSE:MMC Historical Dividend Yield April 2nd 2020
NYSE:MMC Historical Dividend Yield April 2nd 2020

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Marsh & McLennan Companies earnings per share are up 5.5% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past ten years, Marsh & McLennan Companies has increased its dividend at approximately 8.6% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Is Marsh & McLennan Companies an attractive dividend stock, or better left on the shelf? Marsh & McLennan Companies has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

With that being said, if dividends aren't your biggest concern with Marsh & McLennan Companies, you should know about the other risks facing this business. To help with this, we've discovered 1 warning sign for Marsh & McLennan Companies that you should be aware of before investing in their shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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.