OceanFirst Financial's (NASDAQ:OCFC) Dividend Will Be $0.20
OceanFirst Financial Corp. (NASDAQ:OCFC) will pay a dividend of $0.20 on the 18th of August. The dividend yield will be 4.4% based on this payment which is still above the industry average.
See our latest analysis for OceanFirst Financial
OceanFirst Financial's Payment Expected To Have Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, OceanFirst Financial has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but OceanFirst Financial's payout ratio of 33% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to fall by 10.4% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 39%, which would be comfortable for the company to continue in the future.
OceanFirst Financial Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the annual payment back then was $0.48, compared to the most recent full-year payment of $0.80. This means that it has been growing its distributions at 5.2% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. OceanFirst Financial has seen EPS rising for the last five years, at 17% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
OceanFirst Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think OceanFirst Financial might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for OceanFirst Financial that you should be aware of before investing. Is OceanFirst Financial not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
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