Oracle's (NYSE:ORCL) Dividend Will Be $0.32
Oracle Corporation (NYSE:ORCL) has announced that it will pay a dividend of $0.32 per share on the 24th of January. This makes the dividend yield 1.6%, which will augment investor returns quite nicely.
Check out our latest analysis for Oracle
Oracle's Earnings Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much. However, prior to this announcement, Oracle's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to rise by 49.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 29%, which is in the range that makes us comfortable with the sustainability of the dividend.
Oracle Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.24 in 2013 to the most recent total annual payment of $1.28. This means that it has been growing its distributions at 18% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
Oracle 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. Oracle has impressed us by growing EPS at 6.6% per year over the past five years. Oracle definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Oracle Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Oracle might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for Oracle that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
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