Old Point Financial (NASDAQ:OPOF) Is Due To Pay A Dividend Of $0.13

Old Point Financial Corporation (NASDAQ:OPOF) has announced that it will pay a dividend of $0.13 per share on the 30th of December. This payment means the dividend yield will be 2.2%, which is below the average for the industry.

Check out the opportunities and risks within the US Banks industry.

Old Point Financial's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Having distributed dividends for at least 10 years, Old Point Financial has a long history of paying out a part of its earnings to shareholders. Based on Old Point Financial's last earnings report, the payout ratio is at a decent 33%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share could rise by 16.7% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.

Old Point Financial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.20 in 2012, and the most recent fiscal year payment was $0.52. This means that it has been growing its distributions at 10% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Old Point Financial has seen EPS rising for the last five years, at 17% per annum. Old Point Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Old Point Financial 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. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Old Point Financial stock. Is Old Point Financial 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.