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Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend of $0.18 per share on the 31st of March. This means the annual payment will be 2.6% of the current stock price, which is lower than the industry average.
Check out our latest analysis for Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida's Earnings Will Easily Cover The Distributions
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Seacoast Banking Corporation of Florida is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Based on Seacoast Banking Corporation of Florida's last earnings report, calculating for its payout ratio equates to 50%, which means that the company covered its last dividend with comfortable room to spare.
Looking forward, EPS is forecast to rise by 61.3% over the next 3 years. Analysts forecast the future payout ratio could be 38% over the same time horizon, which is a number we think the company can maintain.
Seacoast Banking Corporation of Florida Is Still Building Its Track Record
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was $0.52, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 8.5% 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 Is Doubtful
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Over the past five years, it looks as though Seacoast Banking Corporation of Florida's EPS has declined at around 5.8% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Our Thoughts On Seacoast Banking Corporation of Florida's Dividend
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Seacoast Banking Corporation of Florida has been making. We would probably look elsewhere for an income investment.