How Does ORIOR AG (VTX:ORON) Fare As A Dividend Stock?
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Over the past 7 years, ORIOR AG (VTX:ORON) has returned an average of 3.00% per year to shareholders in terms of dividend yield. Does ORIOR tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for ORIOR
How I analyze a dividend stock
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 it increased its dividend per share amount over the past?
Is is able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does ORIOR fit our criteria?
ORIOR has a trailing twelve-month payout ratio of 40.01%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ORON’s payout to increase to 44.08% of its earnings, which leads to a dividend yield of around 2.64%. However, EPS is forecasted to fall to CHF5.2 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view ORIOR as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, ORIOR produces a yield of 2.49%, which is on the low-side for Food stocks.
Next Steps:
If ORIOR is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer 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. I’ve put together three important factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for ORON’s future growth? Take a look at our free research report of analyst consensus for ORON’s outlook.
Valuation: What is ORON 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 ORON is currently mispriced by the market.
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.
