Oppenheimer Holdings Inc. (NYSE:OPY) is about to trade ex-dividend in the next four days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Oppenheimer Holdings' shares on or after the 13th of November will not receive the dividend, which will be paid on the 27th of November.
The company's upcoming dividend is US$0.20 a share, following on from the last 12 months, when the company distributed a total of US$0.80 per share to shareholders. Based on the last year's worth of payments, Oppenheimer Holdings stock has a trailing yield of around 0.9% on the current share price of US$90.72. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Oppenheimer Holdings can afford its dividend, and if the dividend could grow.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Oppenheimer Holdings has a low and conservative payout ratio of just 9.6% of its income after tax.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Check out our latest analysis for Oppenheimer Holdings
Click here to see how much of its profit Oppenheimer Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's not ideal to see Oppenheimer Holdings's earnings per share have been shrinking at 3.6% a year over the previous five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Oppenheimer Holdings has lifted its dividend by approximately 6.2% a year on average.
The Bottom Line
Is Oppenheimer Holdings an attractive dividend stock, or better left on the shelf? Oppenheimer Holdings's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.
However if you're still interested in Oppenheimer Holdings as a potential investment, you should definitely consider some of the risks involved with Oppenheimer Holdings. Every company has risks, and we've spotted 1 warning sign for Oppenheimer Holdings you should know about.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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