Investors who want to cash in on Sparebanken Øst’s (OB:SPOG) upcoming dividend of øre4.60 per share have only 4 days left to buy the shares before its ex-dividend date, 29 March 2019, in time for dividends payable on the 09 April 2019. What does this mean for current shareholders and potential investors? Below, I will explain how holding Sparebanken Øst can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
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Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Sparebanken Øst pass our checks?
The current trailing twelve-month payout ratio for the stock is 76%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 75% which, assuming the share price stays the same, leads to a dividend yield of 6.9%. In addition to this, EPS is forecasted to fall to NOK4.97 in the upcoming year.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Sparebanken Øst as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, Sparebanken Øst generates a yield of 7.8%, which is high for Banks stocks.
With this in mind, I definitely rank Sparebanken Øst as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three pertinent aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SPOG’s future growth? Take a look at our free research report of analyst consensus for SPOG’s outlook.
- Valuation: What is SPOG worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether SPOG is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.