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Origin Bancorp, Inc. (NYSE:OBK) has announced that it will pay a dividend of $0.15 per share on the 29th of November. This payment means the dividend yield will be 1.9%, which is below the average for the industry.
View our latest analysis for Origin Bancorp
Origin Bancorp's Earnings Will Easily Cover The Distributions
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Having paid out dividends for 6 years, Origin Bancorp has a good history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 25% also shows that Origin Bancorp is able to comfortably pay dividends.
The next 3 years are set to see EPS grow by 20.5%. The future payout ratio could be 24% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Origin Bancorp Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2018, the annual payment back then was $0.13, compared to the most recent full-year payment of $0.60. This works out to be a compound annual growth rate (CAGR) of approximately 29% a year over that time. Origin Bancorp 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.
Origin Bancorp May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Although it's important to note that Origin Bancorp's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. While EPS growth is quite low, Origin Bancorp has the option to increase the payout ratio to return more cash to shareholders.
In Summary
Overall, we think Origin Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
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. Taking the debate a bit further, we've identified 1 warning sign for Origin Bancorp that investors need to be conscious of moving forward. 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.