Origin Bancorp, Inc. (NASDAQ:OBNK) stock is about to trade ex-dividend in 3 days time. This means that investors who purchase shares on or after the 13th of February will not receive the dividend, which will be paid on the 28th of February.
Origin Bancorp's next dividend payment will be US$0.092 per share, on the back of last year when the company paid a total of US$0.37 to shareholders. Based on the last year's worth of payments, Origin Bancorp has a trailing yield of 1.0% on the current stock price of $35.69. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Origin Bancorp can afford its dividend, and if the dividend could grow.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Origin Bancorp has a low and conservative payout ratio of just 11% of its income after tax.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Origin Bancorp's earnings have been skyrocketing, up 38% per annum for the past three years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last two years, Origin Bancorp has lifted its dividend by approximately 69% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
Is Origin Bancorp worth buying for its dividend? Companies like Origin Bancorp that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Origin Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Wondering what the future holds for Origin Bancorp? See what the five analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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