Yahoo Finance Something To Consider Before Buying Oconee Federal Financial Corp. (NASDAQ:OFED) For The 1.5% Dividend
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Oconee Federal Financial Corp. (NASDAQ:OFED) has paid a dividend to shareholders. It currently yields 1.5%. Should it have a place in your portfolio? Let’s take a look at Oconee Federal Financial in more detail.
Check out our latest analysis for Oconee Federal Financial
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Oconee Federal Financial pass our checks?
The current trailing twelve-month payout ratio for the stock is 56%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Oconee Federal Financial as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Oconee Federal Financial generates a yield of 1.5%, which is on the low-side for Mortgage stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Oconee Federal Financial for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three essential factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for OFED’s future growth? Take a look at our free research report of analyst consensus for OFED’s outlook.
Valuation: What is OFED worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether OFED is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
