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Guaranty Bancshares, Inc.'s (NYSE:GNTY) investors are due to receive a payment of $0.24 per share on 8th of January. This payment means that the dividend yield will be 2.8%, which is around the industry average.
Check out our latest analysis for Guaranty Bancshares
Guaranty Bancshares' Dividend Forecasted To Be Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Guaranty Bancshares has a good history of paying out dividends, with its current track record at 8 years. Taking data from its last earnings report, calculating for the company's payout ratio of 40%shows that Guaranty Bancshares would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, EPS is forecast to rise by 19.7% over the next 3 years. The future payout ratio could be 38% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Guaranty Bancshares Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 8 years was $0.473 in 2016, and the most recent fiscal year payment was $0.96. This implies that the company grew its distributions at a yearly rate of about 9.3% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
Dividend Growth May Be Hard To Achieve
The company's investors will be pleased to have been receiving dividend income for some time. Earnings per share has been crawling upwards at 4.0% per year. If Guaranty Bancshares is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
Our Thoughts On Guaranty Bancshares' Dividend
Overall, we think Guaranty Bancshares is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Guaranty Bancshares that investors should know about before committing capital to this stock. 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.