OGE Energy (NYSE:OGE) Is Paying Out A Dividend Of $0.4213

OGE Energy Corp. (NYSE:OGE) will pay a dividend of $0.4213 on the 25th of July. This means the dividend yield will be fairly typical at 3.8%.

Our free stock report includes 2 warning signs investors should be aware of before investing in OGE Energy. Read for free now.

OGE Energy's Future Dividend Projections Appear Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Based on the last payment, OGE Energy's earnings were much higher than the dividend, but it wasn't converting those earnings into cash flow. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

The next year is set to see EPS grow by 8.8%. If the dividend continues on this path, the payout ratio could be 68% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for OGE Energy

OGE Energy Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.00 in 2015 to the most recent total annual payment of $1.69. This works out to be a compound annual growth rate (CAGR) of approximately 5.4% a year over that time. 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 Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. OGE Energy has impressed us by growing EPS at 19% per year over the past five years. The lack of cash flows does make us a bit cautious though, especially when it comes to the future of the dividend.

In Summary

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While OGE Energy is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.

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. Just as an example, we've come across 2 warning signs for OGE Energy you should be aware of, and 1 of them is significant. Is OGE Energy not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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