OGE Energy Corp (NYSE:OGE): 4 Days To Buy Before The Ex-Dividend Date
Shares of OGE Energy Corp (NYSE:OGE) will begin trading ex-dividend in 4 days. To qualify for the dividend check of US$0.36 per share, investors must have owned the shares prior to 09 October 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding OGE Energy can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
Check out our latest analysis for OGE Energy
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
Its annual yield is among the top 25% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It can afford to pay the current rate of dividends from its earnings
It has the ability to keep paying its dividends going forward
High Yield And Dependable
OGE Energy currently yields 4.0%, which is high for Electric Utilities stocks. But the real reason OGE Energy stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of OGE it has increased its DPS from $0.70 to $1.46 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes OGE a true dividend rockstar.
The company currently pays out 40% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 71%, leading to a dividend yield of around 4.1%. However, EPS is forecasted to fall to $2.08 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Next Steps:
OGE Energy’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three key aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for OGE’s future growth? Take a look at our free research report of analyst consensus for OGE’s outlook.
Historical Performance: What has OGE’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.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
