Olympia Financial Group Inc. (TSE:OLY) is about to trade ex-dividend in the next 4 days. You will need to purchase shares before the 22nd of October to receive the dividend, which will be paid on the 31st of October.
Olympia Financial Group's next dividend payment will be CA$0.2 per share. Last year, in total, the company distributed CA$2.8 to shareholders. Based on the last year's worth of payments, Olympia Financial Group stock has a trailing yield of around 6.1% on the current share price of CA$45.01. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Olympia Financial Group paid out more than half (61%) of its earnings last year, which is a regular payout ratio for most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Olympia Financial Group's earnings per share have risen 14% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, ten years ago, Olympia Financial Group has lifted its dividend by approximately 4.4% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Olympia Financial Group is keeping back more of its profits to grow the business.
From a dividend perspective, should investors buy or avoid Olympia Financial Group? Earnings per share are growing nicely, and Olympia Financial Group is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating Olympia Financial Group more closely.
Keen to explore more data on Olympia Financial Group's financial performance? Check out our visualisation of its historical revenue and earnings growth.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.