U.S. markets close in 3 hours 2 minutes
  • S&P 500

    3,982.62
    -43.50 (-1.08%)
     
  • Dow 30

    33,997.34
    -349.69 (-1.02%)
     
  • Nasdaq

    11,113.30
    -113.05 (-1.01%)
     
  • Russell 2000

    1,851.20
    -18.00 (-0.96%)
     
  • Crude Oil

    77.38
    +1.10 (+1.44%)
     
  • Gold

    1,743.10
    -10.90 (-0.62%)
     
  • Silver

    21.04
    -0.39 (-1.82%)
     
  • EUR/USD

    1.0378
    -0.0027 (-0.26%)
     
  • 10-Yr Bond

    3.7050
    +0.0140 (+0.38%)
     
  • GBP/USD

    1.2006
    -0.0084 (-0.70%)
     
  • USD/JPY

    138.7600
    -0.3400 (-0.24%)
     
  • BTC-USD

    16,223.00
    -315.14 (-1.91%)
     
  • CMC Crypto 200

    380.91
    +0.62 (+0.16%)
     
  • FTSE 100

    7,474.02
    -12.65 (-0.17%)
     
  • Nikkei 225

    28,162.83
    -120.20 (-0.42%)
     

OP Bancorp (NASDAQ:OPBK) Will Pay A Larger Dividend Than Last Year At $0.12

OP Bancorp (NASDAQ:OPBK) will increase its dividend from last year's comparable payment on the 25th of August to $0.12. This takes the annual payment to 4.3% of the current stock price, which unfortunately is below what the industry is paying.

View our latest analysis for OP Bancorp

OP Bancorp's Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

OP Bancorp is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 18%, 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 6.9%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 28%, which would be comfortable for the company to continue in the future.

historic-dividend
historic-dividend

OP Bancorp Is Still Building Its Track Record

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. The annual payment during the last 4 years was $0.20 in 2018, and the most recent fiscal year payment was $0.48. This means that it has been growing its distributions at 24% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that OP Bancorp has been growing its earnings per share at 28% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

OP Bancorp Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for OP Bancorp you should be aware of, and 1 of them doesn't sit too well with us. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here