Is Buying Old Point Financial Corporation (NASDAQ:OPOF) For Its Upcoming $0.11 Dividend A Good Choice?
Investors who want to cash in on Old Point Financial Corporation’s (NASDAQ:OPOF) upcoming dividend of $0.11 per share have only 3 days left to buy the shares before its ex-dividend date, 27 February 2018, in time for dividends payable on the 30 March 2018. Is this future income a persuasive enough catalyst for investors to think about Old Point Financial as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Old Point Financial
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share amount increased over the past?
Is is able 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?
How well does Old Point Financial fit our criteria?
Old Point Financial has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Old Point Financial fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, Old Point Financial produces a yield of 1.70%, which is on the low-side for Banks stocks.
Next Steps:
After digging a little deeper into Old Point Financial’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. There are three important aspects you should further research:
1. Historical Performance: What has OPOF’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Old Point Financial’s board and the CEO’s back ground.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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.
