Old National Bancorp (NASDAQ:ONB) Has Re-Affirmed Its Dividend Of US$0.14

Old National Bancorp's (NASDAQ:ONB) investors are due to receive a payment of US$0.14 per share on 15th of March. This means the annual payment is 3.1% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Old National Bancorp

Old National Bancorp's Earnings Easily Cover the Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Old National Bancorp's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 39.9% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 57%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Old National Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from US$0.28 in 2012 to the most recent annual payment of US$0.56. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see Old National Bancorp has been growing its earnings per share at 9.7% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Old National Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Old National Bancorp might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for Old National Bancorp for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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