The board of Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) has announced that it will pay a dividend of $0.21 per share on the 30th of November. The dividend yield is 1.7% based on this payment, which is a little bit low compared to the other companies in the industry.
Southern Missouri Bancorp's Dividend Forecasted To Be Well Covered By Earnings
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Having distributed dividends for at least 10 years, Southern Missouri Bancorp has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Southern Missouri Bancorp's latest earnings report puts its payout ratio at 17%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to rise by 10.3% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 18% by next year, which is in a pretty sustainable range.
Southern Missouri Bancorp Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the annual payment back then was $0.24, compared to the most recent full-year payment of $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. 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.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Southern Missouri Bancorp has been growing its earnings per share at 17% a year over the past five years. Southern Missouri Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Southern Missouri Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Southern Missouri Bancorp that you should be aware of before investing. Is Southern Missouri Bancorp 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here