Is Buying Oil-Dri Corporation of America (ODC) For Its Upcoming $0.23 Dividend A Good Choice?
Important news for shareholders and potential investors in Oil-Dri Corporation of America (NYSE:ODC): The dividend payment of $0.23 per share will be distributed into shareholder on 01 December 2017, and the stock will begin trading ex-dividend at an earlier date, 16 November 2017. So if you want to cash in on ODC’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at ODC’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for ODC
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does Oil-Dri of America pass our checks?
Oil-Dri of America has a payout ratio of 59.96%, meaning the dividend is sufficiently covered by earnings. Analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect to see moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. ODC has increased its DPS from $0.52 to $0.92 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, ODC has a yield of 2.22%, which is on the low-side for household products stocks.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about Oil-Dri of America from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be beneficial exploring other dividend stocks as alternatives to ODC or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, Oil-Dri of America is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, ODC could still be an interesting investment opportunity. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Take a look at our latest free fundmental analysis to explore other aspects of ODC.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
