MetLife Rewards Shareholders with Six Years of Dividend Hikes (MET)
By: Ned Piplovic,
Insurance corporation MetLife, Inc. (NYSE: MET) has managed to avoid any dividend cuts since initiating dividend distributions in 2000 and has offered dividend hikes for the past six consecutive years
In addition to these annual dividend hikes, MetLife offers a 3.7% dividend yield, which currently outperforms the sector and industry segment averages by more than 20%. Conversely, the rising dividend income over the last year has been offset by the company’s share price, which has declined slightly over the past 12 months.
The good news, though, is that the current share price is almost 16% below the analysts’ average price target. Taking a position before the ex-dividend date of August 3, 2018 gives investors the chance to purchase shares at a discounted price and own a company that pays above-average dividend income payments for the sector it is in. All shareholders of record prior to the ex-dividend date will be eligible for the Sept. 13 distribution.
MetLife, Inc. (NYSE:MET)
Headquartered in New York, New York and founded in 1863, MetLife, Inc. engages in the insurance, annuities, employee benefits and asset management businesses. The company operates through five segments — United States, Asia, Europe, the Middle East and Africa, Latin America and MetLife Holdings. Through its business segments, the company offers life, dental, group short-term and long-term disability, individual disability, accidental death and dismemberment and other plans to employers. Additionally, MetLife provides pension risk transfers, institutional income annuities, tort settlements, capital markets investments and other insurance products and services. The company also offers automobile, homeowners and personal liability insurance, as well as small business property, liability and business interruption insurance products. Furthermore, MetLife provides fixed annuities and pension products, medical and credit insurance products, fixed and indexed-linked annuities, as well as protection against the costs of long-term health care services.
MetLife gained more than 14% at the start of its trailing 12-month period, reaching a 52-week high of $55.73 on November 2, 2017. After that, the share price declined more than 22% before reaching its 52-week low of $43.40 on July 3 of this year. Much of this 22% decline came in just two weeks between Jan. 26 and Feb. 8, and accounted for 85% of the entire decline from the 52-week high to the 52-week low.
MetLife climbed slightly after the early July low and closed at $44.91 on July 24. While this price was still almost 20% below the November 2017 peak, it was even with the share price level from five years ago and is 3.5% above the 52-week low from early July.
As for the dividend payments, the current and upcoming payout of $0.42 per share is 5% more than the $0.40 distribution from the same period last year. The $0.42 per share quarterly payout amounts to a $1.68 annualized distribution and a 3.7% dividend yield, which is almost 17% above the company’s own 3.2% average yield over the past five years.
In addition to outperforming its own average yield, MetLife’s current yield is 23% higher than the 3.04% average yield of the entire Financials sector, as well as almost double the 1.9% simple average yield of all the companies in the Life Insurance industry segment. Even excluding the companies that do not distribute dividends, the average yield only goes up to 2.61%.
Over the past six consecutive years of dividend hikes, the company has advanced its total annual dividend amount almost 130%. This level of growth corresponds to an average growth rate of 14.6% per year. Even counting the six years without dividend hikes from 2007 through 2012, MetLife still grew its total annual dividend payout at an average rate of 12.6% per year, and has increased its total annual distribution amount 740% since 2000.
True, the rising dividend was unable to overcome the share price decline over the past few years, but it did manage to limit the total losses to 4.3% and 2.4% over the past one year and three years, respectively. Over five years, the total return was a respectable 17.6%, which means that continued share price growth could quickly turn the current small losses into future double-digit-percentage returns.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.