Yahoo Finance United Security Bancshares' (NASDAQ:UBFO) Dividend Will Be $0.12
The board of United Security Bancshares (NASDAQ:UBFO) has announced that it will pay a dividend on the 22nd of April, with investors receiving $0.12 per share. This means the annual payment is 6.2% of the current stock price, which is above the average for the industry.
View our latest analysis for United Security Bancshares
United Security Bancshares' Payment Expected To Have Solid Earnings Coverage
If the payments aren't sustainable, a high yield for a few years won't matter that much.
United Security Bancshares has a good history of paying out dividends, with its current track record at 7 years. Past distributions do not necessarily guarantee future ones, but United Security Bancshares' payout ratio of 40% is a good sign for current shareholders as this means that earnings decently cover dividends.
If the trend of the last few years continues, EPS will grow by 6.7% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.
United Security Bancshares Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 7 years of history we want to see a few more years of history before making any solid conclusions. Since 2017, the dividend has gone from $0.20 total annually to $0.48. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Has Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that United Security Bancshares has been growing its earnings per share at 6.7% a year over the past five years. United Security Bancshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Our Thoughts On United Security Bancshares' Dividend
In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. 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. As an example, we've identified 1 warning sign for United Security Bancshares that you should be aware of before investing. 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.
