OP Bancorp (NASDAQ:OPBK) Is Due To Pay A Dividend Of $0.12
OP Bancorp (NASDAQ:OPBK) has announced that it will pay a dividend of $0.12 per share on the 24th of August. This means the annual payment is 4.9% of the current stock price, which is above the average for the industry.
Check out our latest analysis for OP Bancorp
OP Bancorp's Payment Expected To Have Solid Earnings Coverage
If the payments aren't sustainable, a high yield for a few years won't matter that much.
OP Bancorp has a short history of paying out dividends, with its current track record at only 4 years. Based on its last earnings report however, the payout ratio is at a comfortable 25%, meaning that OP Bancorp may be able to sustain this dividend for future years if it continues on this earnings trend.
Over the next year, EPS is forecast to fall by 17.7%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 39%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
OP Bancorp Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. Since 2019, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.48. This works out to be a compound annual growth rate (CAGR) of approximately 24% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. OP Bancorp has seen EPS rising for the last five years, at 19% per annum. OP Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like OP Bancorp's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for OP Bancorp that investors should know about before committing capital to this stock. Is OP Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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