Origin Bancorp's (NYSE:OBK) Dividend Will Be $0.15

Origin Bancorp, Inc. (NYSE:OBK) will pay a dividend of $0.15 on the 29th of August. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.

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Origin Bancorp'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.

Origin Bancorp has established itself as a dividend paying company, given its 7-year history of distributing earnings to shareholders. Based on Origin Bancorp's last earnings report, the payout ratio is at a decent 27%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next year is set to see EPS grow by 29.2%. If the dividend continues on this path, the future payout ratio could be 25% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Origin Bancorp

Origin Bancorp Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 7 years of history we want to see a few more years of history before making any solid conclusions. The annual payment during the last 7 years was $0.13 in 2018, and the most recent fiscal year payment was $0.60. This works out to be a compound annual growth rate (CAGR) of approximately 24% 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 Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Origin Bancorp has grown earnings per share at 9.5% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Origin Bancorp's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Origin Bancorp for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield 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.