SB Financial Group (NASDAQ:SBFG) Is Due To Pay A Dividend Of $0.125
SB Financial Group, Inc. (NASDAQ:SBFG) has announced that it will pay a dividend of $0.125 per share on the 24th of February. This payment means that the dividend yield will be 2.9%, which is around the industry average.
View our latest analysis for SB Financial Group
SB Financial Group's Earnings Will Easily Cover The Distributions
We aren't too impressed by dividend yields unless they can be sustained over time.
SB Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but SB Financial Group's payout ratio of 27% is a good sign as this means that earnings decently cover dividends.
Unless the company can turn things around, EPS could fall by 2.1% over the next year. If the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 31%, which is definitely feasible to continue.
SB Financial Group Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.0952 in 2013, and the most recent fiscal year payment was $0.48. This implies that the company grew its distributions at a yearly rate of about 18% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
SB Financial Group May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. It's not great to see that SB Financial Group's earnings per share has fallen at approximately 2.1% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.
Our Thoughts On SB Financial Group's Dividend
Overall, a consistent dividend is a good thing, and we think that SB Financial Group has the ability to continue this into the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. 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. If you are a dividend investor, you might also want to look at our curated 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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