Assessing the Sustainability and Growth of OSBC's Dividends
Old Second Bancorp Inc (OSBC, Financial) recently announced a dividend of $0.05 per share, payable on 2024-02-05, with the ex-dividend date set for 2024-01-25. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Old Second Bancorp Inc's dividend performance and assess its sustainability.
What Does Old Second Bancorp Inc Do?
Old Second Bancorp Inc is a bank holding company. It provides consumer and commercial banking products such as demand, money market, savings, time deposit, individual retirement as well as commercial, industrial, consumer, and real estate lending, including installment loans, student loans, agricultural loans, lines of credit and overdraft checking, safe deposit operations, trust services, wealth management services, and additional services tailored to the needs of individual customers, corporates, small-medium enterprises. The company's revenue consists of interest, commission, payments, and other income.
A Glimpse at Old Second Bancorp Inc's Dividend History
Old Second Bancorp Inc has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Old Second Bancorp Inc's Dividend Yield and Growth
As of today, Old Second Bancorp Inc currently has a 12-month trailing dividend yield of 1.30% and a 12-month forward dividend yield of 1.30%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Old Second Bancorp Inc's annual dividend growth rate was 71.00%. Extended to a five-year horizon, this rate decreased to 41.70% per year. Based on Old Second Bancorp Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Old Second Bancorp Inc stock as of today is approximately 7.43%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Old Second Bancorp Inc's dividend payout ratio is 0.09.
Old Second Bancorp Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Old Second Bancorp Inc's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Old Second Bancorp Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Old Second Bancorp Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Old Second Bancorp Inc's revenue has increased by approximately 8.10% per year on average, a rate that outperforms approximately 59.27% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Old Second Bancorp Inc's earnings increased by approximately 7.60% per year on average, a rate that outperforms approximately 46.92% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 19.10%, which outperforms approximately 80.22% of global competitors.
Next Steps
In conclusion, Old Second Bancorp Inc's consistent dividend payments, robust dividend growth rate, low payout ratio, and fair profitability and growth metrics paint a picture of a company with a sustainable dividend policy. These factors, combined with the company's ability to grow revenue and earnings, suggest that Old Second Bancorp Inc could be a compelling choice for value investors focused on income-generating stocks. As the company continues to navigate the financial landscape, investors should monitor these key indicators to gauge the future trajectory of Old Second Bancorp Inc's dividends. For further investment research, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
