The board of Park-Ohio Holdings Corp. (NASDAQ:PKOH) has announced a dividend payment of $0.125 per share on May 17th. This will result in a dividend yield of 2.1%, which is a positive boost for shareholders.
Park-Ohio Holdings’ dividend payment is well-supported by its earnings, with both cash flow and earnings comfortably covering the dividend prior to this announcement. This indicates that the company is retaining most of its earnings to fuel future growth.
Looking ahead, EPS is expected to grow by 17.7% over the next year. If the dividend continues on this trajectory, the payout ratio could be a sustainable 16% by next year.
While Park-Ohio Holdings has a history of fluctuating dividends, with at least one cut in the last 10 years, the company has managed to keep its annual payment steady at $0.50. However, with earnings per share decreasing by approximately 8.8% annually over the last five years, the potential for dividend growth is uncertain.
Overall, Park-Ohio Holdings may not be an ideal dividend stock due to its past dividend volatility and declining earnings per share. Investors typically prefer companies with a consistent dividend policy. It is important to consider various factors before investing in a stock.
This article provides general commentary based on historical data and analyst forecasts. It is not financial advice and does not constitute a recommendation to buy or sell any stock. Simply Wall St aims to offer unbiased analysis driven by fundamental data.