Omega Flex Inc (OFLX): A Comprehensive Analysis of Its Dividend Performance
Unraveling Omega Flex Inc's Dividend History, Yield, Growth, and Sustainability
Omega Flex Inc (NASDAQ:OFLX) recently announced a dividend of $0.33 per share, payable on 2023-10-06, with the ex-dividend date set for 2023-09-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Omega Flex Inc's dividend performance and assess its sustainability.
Company Overview: Omega Flex Inc
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Omega Flex Inc is a manufacturer of flexible metal hoses. Operating in the segment of manufacture and sale of flexible metal hose and accessories, its products are used for gas piping within residential and commercial buildings. Under the TracPipe, CounterStrike, DoubleTrac, AutoFlare, DEF-Trac, SolarTrac, and AutoSnap brands, Omega Flex Inc serves various markets which include construction, manufacturing, transportation, petrochemical, pharmaceutical, and other industries. The company primarily operates in the United States.
A Glimpse at Omega Flex Inc's Dividend History
Omega Flex Inc has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Omega Flex Inc's Dividend Yield and Growth
As of today, Omega Flex Inc currently has a 12-month trailing dividend yield of 1.64% and a 12-month forward dividend yield of 1.67%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Omega Flex Inc's annual dividend growth rate was 5.30%. Extended to a five-year horizon, this rate increased to 12.00% per year. Based on Omega Flex Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Omega Flex Inc stock as of today is approximately 2.89%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Omega Flex Inc's dividend payout ratio is 0.57.
Omega Flex Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Omega Flex Inc's profitability 9 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Omega Flex Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Omega Flex Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Omega Flex Inc's revenue has increased by approximately 4.10% per year on average, a rate that underperforms than approximately 58.02% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Omega Flex Inc's earnings increased by approximately 11.00% per year on average, a rate that underperforms than approximately 50.71% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.90%, underperforms than approximately 50.5% of global competitors.
Conclusion: Omega Flex Inc's Dividend Sustainability
Based on Omega Flex Inc's consistent dividend payment history, promising yield and growth rates, reasonable payout ratio, and strong profitability, it is evident that the company is committed to rewarding its shareholders. However, while its growth metrics suggest a positive trajectory, they slightly lag behind global competitors. Hence, investors should continue to monitor these parameters closely. In conclusion, Omega Flex Inc appears to be a viable option for investors seeking steady dividend income, but its growth metrics warrant further examination.
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This article first appeared on GuruFocus.
