Readers hoping to buy OceanaGold Corporation (TSE:OGC) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase OceanaGold's shares on or after the 21st of May, you won't be eligible to receive the dividend, when it is paid on the 20th of June.

The company's next dividend payment will be US$0.01 per share, and in the last 12 months, the company paid a total of US$0.02 per share. Based on the last year's worth of payments, OceanaGold stock has a trailing yield of around 1.0% on the current share price of CA$5.67. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether OceanaGold has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. OceanaGold is paying out just 7.3% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. A useful secondary check can be to evaluate whether OceanaGold generated enough free cash flow to afford its dividend. Luckily it paid out just 5.0% of its free cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

See our latest analysis for OceanaGold

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.TSX:OGC Historic Dividend May 16th 2025

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see OceanaGold has grown its earnings rapidly, up 78% a year for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, OceanaGold looks like a promising growth company.

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The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the OceanaGold dividends are largely the same as they were 10 years ago.

The Bottom Line

Should investors buy OceanaGold for the upcoming dividend? OceanaGold has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. There's a lot to like about OceanaGold, and we would prioritise taking a closer look at it.

So while OceanaGold looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 1 warning sign for OceanaGold you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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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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