FB Financial (NYSE:FBK) Is Increasing Its Dividend To $0.17
FB Financial Corporation's (NYSE:FBK) periodic dividend will be increasing on the 27th of February to $0.17, with investors receiving 13% more than last year's $0.15. This takes the annual payment to 1.6% of the current stock price, which unfortunately is below what the industry is paying.
Check out our latest analysis for FB Financial
FB Financial's Payment Expected To Have Solid Earnings Coverage
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
FB Financial has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. While past data isn't a guarantee for the future, FB Financial's latest earnings report puts its payout ratio at 23%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to expand by 20.3%. The future payout ratio could be 23% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
FB Financial Is Still Building Its Track Record
FB Financial's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 6 years was $0.24 in 2018, and the most recent fiscal year payment was $0.60. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
FB Financial 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. Unfortunately things aren't as good as they seem. However, FB Financial's EPS was effectively flat over the past five years, which could stop the company from paying more every year.
Our Thoughts On FB Financial's Dividend
Overall, we always like to see the dividend being raised, but we don't think FB Financial will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments FB Financial has been making. We would be a touch cautious of relying on this stock primarily for the dividend income.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for FB Financial that you should be aware of before investing. 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.
