OP Bancorp (NASDAQ:OPBK) Has Affirmed Its Dividend Of $0.12

The board of OP Bancorp (NASDAQ:OPBK) has announced that it will pay a dividend on the 20th of February, with investors receiving $0.12 per share. This payment means that the dividend yield will be 3.4%, which is around the industry average.

See our latest analysis for OP Bancorp

OP 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.

OP Bancorp has a good history of paying out dividends, with its current track record at 6 years. Based on OP Bancorp's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, EPS is forecast to rise by 43.4% over the next 3 years. Analysts estimate the future payout ratio will be 29% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

OP Bancorp Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2019, the dividend has gone from $0.20 total annually to $0.48. This means that it has been growing its distributions at 16% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

We Could See OP Bancorp's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that OP Bancorp has grown earnings per share at 6.4% per year over the past five years. OP Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on OP Bancorp management tenure, salary, and performance. Is OP Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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