Olympia Financial Group's Steady Dividend Amid Modest Growth Signals Resilience

Olympia Financial Group Inc. (TSX: OLY) has maintained its $0.60 CAD monthly dividend for shareholders since September 2023, with the May 2025 payout reaffirming its commitment to consistent income generation. This stability contrasts with the company’s modest financial performance, raising questions about the sustainability of its dividend policy and its appeal to income-focused investors.

Dividend Stability Amid Mixed Financials

The dividend increase in September 2023—a 33.33% jump from $0.45 CAD—was a pivotal moment for OLY, boosting its forward yield to 7.5% by late 2023. Since then, the dividend has remained unchanged, providing predictability for investors. As of May 2025, the annual dividend stands at $7.20 CAD, yielding 6.81% based on its $105.70 CAD share price (see table below).

The dividend’s 72.4% payout ratio (based on earnings) and 84.2% coverage by cash flow indicate financial health, but the company’s recent financials highlight challenges. In Q1 2025, revenue was $10.68 million, with net earnings of $2.09 million. Analysts project flat revenue growth for 2025 ($71.48 million, up 0.21% year-over-year) and a slight decline in 2026.

A Closer Look at the Business Model

Olympia Financial Group operates through subsidiaries specializing in trust services, currency exchange, and private health plans. Its core subsidiary, Olympia Trust Company, serves self-directed registered plans and corporate clients across nine Canadian provinces. While niche, these services are stable but face margin pressures in a slow-growth environment.

The company’s leadership, including CEO Rick Skauge and CFO Jennifer Urscheler, has prioritized shareholder returns over aggressive expansion. This focus is evident in its “eligible dividend” designation under Canadian tax law, which enhances after-tax income for investors.

Risks and Considerations

• Revenue Stagnation: Projections suggest negligible growth through 2026, raising concerns about long-term earnings resilience.
• Valuation: The stock trades at $102.95 CAD, far below the $139.20 CAD analyst target, reflecting skepticism about growth potential.
• Market Competition: The trust and currency sectors face regulatory and competitive pressures, which could erode margins.

Why the Dividend Matters

Despite these risks, the 6.81% yield (exceeding the Canadian market’s top 25%) makes OLY attractive for income investors. The dividend’s 30% average annual growth rate since 2022 signals management’s confidence in cash flow stability.

Conclusion: A Reliable Income Play, But Growth Remains Limited

Olympia Financial Group’s dividend stability positions it as a high-yield defensive stock, particularly for retirees or conservative investors. The $0.60 CAD monthly payout, supported by a sustainable payout ratio, offers predictability in an uncertain market. However, its lackluster revenue growth and stagnant valuation suggest limited upside for capital appreciation.

Investors should weigh the 6.81% yield against the company’s reliance on niche services and modest financial prospects. For those seeking income over growth, OLY remains a contender—provided shareholders accept that dividend hikes may be on pause until earnings improve.

In a landscape of tepid growth, Olympia’s dividend resilience is its strongest suit, even if its financial story is far from flashy.