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Have you been keeping an eye on Oil-Dri Corporation of America’s (NYSE:ODC) upcoming dividend of US$0.24 per share payable on the 01 March 2019? Then you only have 4 days left before the stock starts trading ex-dividend on the 14 February 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Oil-Dri of America’s latest financial data to analyse its dividend characteristics.
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
Does Oil-Dri of America pass our checks?
Oil-Dri of America has a trailing twelve-month payout ratio of 113%, meaning the dividend is not sufficiently covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of ODC it has increased its DPS from $0.56 to $0.96 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes ODC a true dividend rockstar.
Compared to its peers, Oil-Dri of America produces a yield of 3.6%, which is high for Household Products stocks but still below the market’s top dividend payers.
Taking all the above into account, Oil-Dri of America is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ODC’s future growth? Take a look at our free research report of analyst consensus for ODC’s outlook.
- Valuation: What is ODC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ODC is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger 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 email@example.com.