Oppenheimer Holdings (NYSE:OPY) Has Affirmed Its Dividend Of $0.18

Oppenheimer Holdings Inc. (NYSE:OPY) will pay a dividend of $0.18 on the 28th of November. This payment means the dividend yield will be 1.0%, which is below the average for the industry.

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Oppenheimer Holdings' Payment Could Potentially Have Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, Oppenheimer Holdings' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 9.0% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 8.6% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Oppenheimer Holdings

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the annual payment back then was $0.44, compared to the most recent full-year payment of $0.72. This means that it has been growing its distributions at 5.0% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Oppenheimer Holdings might have put its house in order since then, but we remain cautious.

Oppenheimer Holdings Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see that Oppenheimer Holdings has been growing its earnings per share at 9.0% 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 Oppenheimer Holdings' Dividend

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. 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. Case in point: We've spotted 2 warning signs for Oppenheimer Holdings (of which 1 is a bit unpleasant!) you should know about. Is Oppenheimer Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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