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Origin Bancorp, Inc. (NYSE:OBK) will pay a dividend of $0.15 on the 28th of February. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.
Check out our latest analysis for Origin Bancorp
Origin Bancorp's Dividend Forecasted To Be Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end.
Origin Bancorp has a good history of paying out dividends, with its current track record at 7 years. Using data from its latest earnings report, Origin Bancorp's payout ratio sits at 24%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, EPS is forecast to rise by 47.6% over the next 3 years. Analysts estimate the future payout ratio will be 20% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Origin Bancorp Is Still Building Its Track Record
Origin Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 7 years was $0.13 in 2018, and the most recent fiscal year payment was $0.60. This implies that the company grew its distributions at a yearly rate of about 24% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
Origin Bancorp May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. However, Origin Bancorp's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, Origin Bancorp could always pay out a higher proportion of earnings to increase shareholder returns.
Our Thoughts On Origin Bancorp's Dividend
Overall, a consistent dividend is a good thing, and we think that Origin Bancorp has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Origin Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.