Old National Bancorp (NASDAQ:ONB) Has Announced A Dividend Of $0.14

Old National Bancorp (NASDAQ:ONB) will pay a dividend of $0.14 on the 16th of December. This means the dividend yield will be fairly typical at 2.6%.

See our latest analysis for Old National Bancorp

Old National Bancorp's Payment Expected To Have Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Old National Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Old National Bancorp's payout ratio of 34% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 40.4% over the next 3 years. Analysts estimate the future payout ratio will be 28% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Old National Bancorp Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.44 in 2014, and the most recent fiscal year payment was $0.56. This means that it has been growing its distributions at 2.4% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Old National Bancorp May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Earnings has been rising at 2.7% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Old National Bancorp could always pay out a higher proportion of earnings to increase shareholder returns.

Old National Bancorp Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Old National Bancorp that investors need to be conscious of moving forward. Is Old National 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.