Omega Flex, Inc. (NASDAQ: OFLX) announced that it will increase its dividend on July 6 to US $ 0.30. This brings the annual payout to 0.8% of the current share price, which is sadly less than what the industry is paying.

See our latest review for Omega Flex

Omega Flex payment has strong revenue coverage

Even a low dividend yield can be attractive if it lasts for years. Prior to this announcement, Omega Flex’s dividend was comfortably covered by both cash flow and earnings. This indicates that a large portion of the profits are reinvested in the business, with the aim of fueling growth.

Over the next year, EPS could increase by 7.4% if recent trends continue. If the dividend continues on this path, the payout ratio could be 59% by next year, which we believe may be quite sustainable going forward.

Omega Flex continues to build its track record

The Omega Flex dividend has been fairly stable for a little while now, but we will continue to be cautious until it is demonstrated in a few years. Since 2013, the dividend has increased from US $ 0.42 to US $ 1.20. This means that he increased his distributions by 14% per year during this period. We’re not too excited about the relatively short history of dividend payments, but the dividend is growing at a good pace and we could take a closer look.

Omega Flex could increase its dividend

Investors who have held shares of the company for the past several years will be pleased with the dividend income they have received. Omega Flex has impressed us by increasing BPA by 7.4% per year over the past five years. Profits are on the rise, and he pays only a small portion of those profits to shareholders.

Our thoughts on the Omega Flex dividend

Overall, it’s great to see the dividend go up and that it’s still in a sustainable range. While payout ratios are a good sign, we’re less excited about the company’s dividend record. The dividend looks okay, but there have been a few issues in the past so we would be a little cautious.

Market movements testify to the high value of a coherent dividend policy compared to a more unpredictable one. However, there are other things for investors to consider when analyzing the performance of stocks. For example, we have chosen 1 warning sign for Omega Flex that investors should consider. Looking for more high yield dividend ideas? Try our organized list of big dividend payers.

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