The board of Orca Energy Group Inc. (CVE:ORC.B) has announced that it will pay a dividend of $0.10 per share on the 14th of July. This means the annual payment is 7.5% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Orca Energy Group
Orca Energy Group's Dividend Is Well Covered By Earnings
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, Orca Energy Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
If the trend of the last few years continues, EPS will grow by 31.3% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 32%, which is in the range that makes us comfortable with the sustainability of the dividend.
Orca Energy Group Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. Since 2019, the dividend has gone from $0.148 total annually to $0.293. This implies that the company grew its distributions at a yearly rate of about 19% over that duration. Orca Energy Group has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Orca Energy Group has impressed us by growing EPS at 31% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
We Really Like Orca Energy Group's Dividend
Overall, we like to see the dividend staying consistent, and we think Orca Energy Group might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Orca Energy Group that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.