Oma Säästöpankki Oyj's (HEL:OMASP) Dividend Will Be Increased To €1.00

Oma Säästöpankki Oyj (HEL:OMASP) has announced that it will be increasing its dividend from last year's comparable payment on the 8th of April to €1.00. Even though the dividend went up, the yield is still quite low at only 3.1%.

View our latest analysis for Oma Säästöpankki Oyj

Oma Säästöpankki Oyj's Earnings Will Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end.

Oma Säästöpankki Oyj has a good history of paying out dividends, with its current track record at 5 years. While past records don't necessarily translate into future results, the company's payout ratio of 19% also shows that Oma Säästöpankki Oyj is able to comfortably pay dividends.

The next 3 years are set to see EPS grow by 13.2%. Analysts forecast the future payout ratio could be 33% over the same time horizon, which is a number we think the company can maintain.

Oma Säästöpankki Oyj Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 5 years was €0.14 in 2019, and the most recent fiscal year payment was €0.67. This works out to be a compound annual growth rate (CAGR) of approximately 37% 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

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Oma Säästöpankki Oyj has been growing its earnings per share at 34% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

An additional note is that the company has been raising capital by issuing stock equal to 10% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Oma Säästöpankki Oyj Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Oma Säästöpankki Oyj is a strong income stock thanks to its track record and growing earnings. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Oma Säästöpankki Oyj that investors should take into consideration. Is Oma Säästöpankki Oyj 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.