Read this before buying QBE Insurance Group Ltd for its dividend

QBE Insurance Group Ltd (ASX:QBE) shares go ex-dividend on Thursday March 7, 2019. Here's what you need to know.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The QBE Insurance Group Ltd (ASX: QBE) share price dropped 2.6% yesterday, but if you've been thinking of buying shares in the global insurance provider for its juicy divided there are a few things you need to know.

The first is that QBE shares will go ex-dividend on Thursday, March 7, 2019.  This is the date when shares start selling without the value of its next dividend payment.

An investor needs to own the shares before the ex-date to receive the dividend which will be paid on Thursday, April 18, 2019.

What is QBE Insurance Group's dividend yield?

At its recent full-year results, QBE declared a dividend of 28 cents per share (cps) for the half year. This was up substantially on the 4 cps dividend declared in the prior corresponding period and at the current share price QBE offers a trailing dividend yield of 4%, partially franked.

Is the QBE dividend sustainable going forward?

This is a great question to ask before buying any company for its dividend.

Last month QBE presented a net profit after tax (NPAT) of US$390 million for the 12 months to 31 December 2018, a sharp turnaround from the US$1.25 billion loss in the prior year, supported by lower catastrophe claims and the dumping of underperforming operations.

The profit was pleasing to see after years of underperformance for investors.

The simplification strategy and improvement in QBE's operating margins is a promising sign for dividends going forward. However, it is curious to see that despite the positive reported cash profit, net cash flows from operations was negative for the year. This is something I will definitely be keeping my eye on.

Foolish Takeaway

I am forever wary of QBE after years of disappointing results in a highly competitive industry, but it does look like the company has managed to jettison its dead-weight to become sharper and more focused. Baring new catastrophes this should help to increase, or at a minimum maintain, cash returns for investors going forward.

Fortunately, there are several other big companies going ex-dividend on 07 March for income investors to consider, including:

Motley Fool contributor Regan Pearson has no position in any of the stocks mentioned. You can follow him on Twitter @Regan_Invests. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Man with rocket wings which have flames coming out of them.
Broker Notes

These ASX 200 shares could rise 40%+

Big returns could be on offer from these shares according to analysts.

Read more »

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Broker Notes

Analysts say these ASX shares are top buys in June

Brokers are urging investors to buy these shares. Let's find out why.

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors finished the trading week on a high note this Friday.

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Brainchip, Findi, Lottery Corp, and REA shares are falling today

These shares are ending the week in the red. But why?

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 shares leading the charge higher this week

Investors have been piling into these four ASX 200 shares this week. But why?

Read more »

Woman and man calculating a dividend yield.
REITs

What price target does Macquarie have on Goodman Group shares?

Goodman Group posted an interesting set of numbers in Q3. Here's Macquarie's take.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why Catapult, Champion Iron, Healthco, and Meeka Metals shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »