American International Group Raises Dividend to $0.40

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The board of American International Group, Inc. (NYSE: AIG) has announced an increase in its dividend payment on June 28th to $0.40, marking an 11% rise from last year’s payment of $0.36 for the same period. With this adjustment, the dividend yield for the company stands at 1.8%, which is in line with industry standards.

American International Group’s dividend payment is well supported by its earnings coverage. Prior to this announcement, the company was generating sufficient earnings to cover the dividend, indicating that a significant portion of its earnings were being retained to support business growth.

Looking ahead, the company is expected to witness a 17.5% growth in earnings per share (EPS) in the next year. If the dividend follows this trajectory, the payout ratio could potentially reach 19% by the following year, suggesting sustainability in the long term.

Furthermore, American International Group has a solid track record of dividend payments, with distributions remaining stable over a long period. Since 2014, the annual dividend has increased from $0.40 to $1.44, indicating a yearly growth rate of approximately 14%. This consistent dividend growth is a positive sign for investors.

Considering the company’s robust earnings growth of 35% per year over the past five years and its low payout ratio, American International Group appears to be effectively reinvesting in its business for future growth. This makes it an attractive option for dividend investors seeking both stability and growth potential.

In conclusion, the increase in dividend payment and its sustainability, coupled with strong earnings coverage and growth prospects, position American International Group as a promising dividend stock. However, investors should also consider other factors before making investment decisions. Analyzing analyst estimates and exploring high yield dividend stocks can provide additional insights for dividend investors.