Orca Energy Group's (CVE:ORC.B) Dividend Will Be $0.10

The board of Orca Energy Group Inc. (CVE:ORC.B) has announced that it will pay a dividend of $0.10 per share on the 12th of January. Based on this payment, the dividend yield on the company's stock will be 8.9%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Orca Energy Group

Orca Energy Group's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Orca Energy Group's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

EPS is set to grow by 24.3% over the next year if recent trends continue. If recent patterns in the dividend continue, the payout ratio in 12 months could be 80% which is a bit high but can definitely be sustainable.

Orca Energy Group Doesn't Have A Long Payment History

It is great to see that Orca Energy Group has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2018, the annual payment back then was $0.148, compared to the most recent full-year payment of $0.288. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

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. Orca Energy Group has seen EPS rising for the last five years, at 24% per annum. Orca Energy Group is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Orca Energy Group Looks Like A Great Dividend Stock

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 company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 2 warning signs for Orca Energy Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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