Origin Bancorp, Inc.'s (NYSE:OBK) investors are due to receive a payment of $0.15 per share on 27th of February. This means the annual payment will be 1.4% of the current stock price, which is lower than the industry average.

Origin Bancorp's Earnings Will Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive.

Origin Bancorp has a good history of paying out dividends, with its current track record at 8 years. Using data from its latest earnings report, Origin Bancorp's payout ratio sits at 25%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 92.8% over the next 3 years. The future payout ratio could be 17% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Origin Bancorp Doesn't Have A Long Payment History

Origin Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.13 in 2018 to the most recent total annual payment of $0.60. This works out to be a compound annual growth rate (CAGR) of approximately 21% a year over that time. Origin Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

Origin Bancorp Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Origin Bancorp has seen EPS rising for the last five years, at 9.3% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Origin Bancorp's prospects of growing its dividend payments in the future.

We Really Like Origin Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Origin Bancorp might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. Is Origin Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.