IAG shares go ex-dividend tomorrow: Should you buy now?

Do analysts think this insurance giant's shares are good value?

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Man holding out Australian dollar notes, symbolising dividends.

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If you want to receive the next Insurance Australia Group Ltd (ASX: IAG) dividend, then you will have to act fast.

That's because the insurance giant's shares are going ex-dividend on Wednesday.

When a share trades ex-dividend, it means the rights to an upcoming payout are settled.

So, this means you have until the close of play today to buy IAG shares if you want to receive its 10 cents per share partially franked interim dividend.

Should you buy IAG shares?

Opinion remains divided on whether the insurance company's shares are good value at present.

Goldman Sachs currently has a neutral rating and $6.00 price target on its shares. This implies approximately 3.4% downside from current levels. The broker prefers rival Suncorp Group Ltd (ASX: SUN).

It's a similar story at Morgans, with its analysts putting a hold rating and $6.17 price target on the company's shares on Monday.

But there are a couple of bulls out there. The team at Macquarie has an outperform rating and $6.40 price target on its shares. This implies modest upside from current levels.

Citi, on the other hand, sees meaningful upside for investors. It has a buy rating and $6.75 price target on IAG shares.

If Citi's analysts are on the money with their recommendation, it would mean a gain of 8.5% for investors over the next 12 months.

In addition, the broker expects a dividend yield of 4.2% for the year, which stretches the total potential return to almost 13%.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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