Yahoo Finance ServisFirst (SFBS) Stock Rises on 21.7% Dividend Increase
Shares of ServisFirst Bancshares, Inc. SFBS gained 2.4% in after-hours trading following the announcement of a dividend hike. The company’s board of directors has approved an increase in its quarterly dividend to 28 cents per share, marking a 21.7% hike from the prior payout. The increased amount will be paid out on Jan 6, 2023, to shareholders on record as of Jan 3.
Based on the increased rate, the annual dividend came to $1.12 a share, resulting in an annualized yield of 1.68%, considering the company’s closing price of $66.49 as of Dec 20. The yield is not only attractive to income investors but also represents a steady income stream.
The company has hiked its dividend every year since 2014. In December 2021, it increased the dividend by 15% to 23 cents per share.
ServisFirst’s ability to sustain the hiked dividend depends on earnings growth and the payout ratio. The company’s current payout ratio is 21%, lower than the industry’s average of 41.7%, indicating decent scope for a steady dividend increase.
Further, ServisFirst’s performance depicts a robust earnings picture. Over the last five years, the company’s earnings grew at an 18.1% rate, higher than the industry average of 13.2%. The momentum is likely to continue in the upcoming period, as indicated by 19.4% projected earnings growth this year and 5.8% for 2023.
Our Take
We believe that such continuous hikes highlight SFBS’ operational strength and commitment toward rewarding shareholders handsomely. As investors are always on the lookout for companies with a track record of consistent and incremental dividend payments to betting their money on, solid dividend payouts are arguably the biggest enticement for such investors. Such moves also boost shareholders’ confidence in ServisFirst.
However, the deteriorating macroeconomic outlook remains a major near-term headwind, which will likely hurt its financials.
Shares of SFBS have lost 21.8% over the past year compared with the industry’s decline of 13.5%.
Image Source: Zacks Investment Research
SFBS carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Steps by Other Financial Firms
Franklin Resources, Inc.’s BEN board of directors announced a 3.4% hike in its quarterly dividend. The company will pay a dividend of 30 cents per share, up from 29 cents paid out in the prior quarter. The increased amount will be paid out on Jan 13, 2023, to shareholders on record as of Dec 30, 2022.
Notably, BEN has hiked its dividend every year since 1981. Prior to this hike, the company increased its dividend by 3.6% in December 2021 to 29 cents per share.
Raymond James Financial, Inc.’s RJF board of directors announced a quarterly cash dividend of 42 cents per share, representing an increase of 24% from the prior payout. The new dividend will be paid out on Jan 17, 2023, to shareholders of record as of Jan 3, 2023.
Raymond James has a record of regularly raising dividends over the last decade. Prior to the recent hike, the company announced a 31% increase in its quarterly dividend to 34 cents in December 2021.
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ServisFirst Bancshares, Inc. (SFBS) : Free Stock Analysis Report
