OneMain Holdings Inc's Dividend Analysis
Exploring the Dividend Performance and Sustainability of OneMain Holdings Inc
OneMain Holdings Inc (NYSE:OMF) recently announced a dividend of $1 per share, payable on 2023-11-10, with the ex-dividend date set for 2023-11-03. 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 delve into OneMain Holdings Inc's dividend performance and assess its sustainability.
What Does OneMain Holdings Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
OneMain Holdings Inc is one of the leading nonprime consumer finance companies in the United States. It formed after a transaction brought together two branch-based consumer finance companies with complementary strategies and locations. Its services include providing personal loan products, offering credit and noncredit insurance, servicing loans, pursuing strategic acquisitions and dispositions of assets and businesses, and on occasion, establishing joint ventures or forming strategic alliances. The company operates through its one reportable segment - consumer and insurance. In addition to hundreds of branches, the company also has a significant online business. The main source of revenue is net interest income.
A Glimpse at OneMain Holdings Inc's Dividend History
Since 2019, OneMain Holdings Inc has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The chart below provides a historical view of the company's annual Dividends Per Share.
Breaking Down OneMain Holdings Inc's Dividend Yield and Growth
As of today, OneMain Holdings Inc has a 12-month trailing dividend yield of 10.32% and a 12-month forward dividend yield of 10.44%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate has been 56.00%. Based on these figures, the 5-year yield on cost of OneMain Holdings Inc stock as of today is approximately 10.32%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of OneMain Holdings Inc's dividend can be assessed by evaluating the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-09-30, the company's dividend payout ratio is 0.72, which may suggest that the sustainability of the company's dividend is questionable. The company's profitability rank of 5 out of 10 as of 2023-09-30 suggests fair profitability, with the company reporting net profit in 8 out of the past 10 years.
Growth Metrics: The Future Outlook
OneMain Holdings Inc's growth rank of 5 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicates a strong revenue model, with an average increase of approximately 7.40% per year. This rate outperforms approximately 58.25% of global competitors. The company's 3-year EPS growth rate of approximately 2.30% per year on average outperforms approximately 38.6% of global competitors. The company's 5-year EBITDA growth rate of 37.50% outperforms approximately 87.13% of global competitors.
Conclusion
The analysis of OneMain Holdings Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics suggests a mixed picture. While the company's dividend yield and growth rate are impressive, the sustainability of its dividends is questionable due to a high payout ratio. However, the company's fair growth and profitability rankings, combined with strong revenue and EPS growth rates, indicate potential for future success. Investors should closely monitor these factors when considering OneMain Holdings Inc as a potential investment.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
