In This Article:
SB Financial Group, Inc. (NASDAQ:SBFG) will increase its dividend from last year's comparable payment on the 30th of May to $0.15. This takes the annual payment to 3.1% of the current stock price, which is about average for the industry.
SB Financial Group's Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
SB Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 33%, which means that SB Financial Group would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 39.7%. Analysts forecast the future payout ratio could be 28% over the same time horizon, which is a number we think the company can maintain.
View our latest analysis for SB Financial Group
SB Financial Group 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. Since 2015, the annual payment back then was $0.152, compared to the most recent full-year payment of $0.60. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. Unfortunately, SB Financial Group's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. If SB Financial Group is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
We Really Like SB Financial Group's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in SB Financial Group stock. Is SB Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.