First Bancshares (NASDAQ:FBMS) Is Increasing Its Dividend To $0.19
The First Bancshares, Inc. (NASDAQ:FBMS) will increase its dividend from last year's comparable payment on the 25th of August to $0.19. This takes the annual payment to 2.6% of the current stock price, which is about average for the industry.
View our latest analysis for First Bancshares
First Bancshares' Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
First Bancshares has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, First Bancshares' latest earnings report puts its payout ratio at 23%, showing that the company can pay out its dividends comfortably.
The next 3 years are set to see EPS grow by 13.8%. Analysts forecast the future payout ratio could be 22% over the same time horizon, which is a number we think the company can maintain.
First Bancshares Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.15 in 2012, and the most recent fiscal year payment was $0.76. This means that it has been growing its distributions at 18% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. First Bancshares has seen EPS rising for the last five years, at 23% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
We Really Like First Bancshares' Dividend
Overall, a dividend increase is always good, and we think that First Bancshares is a strong income stock thanks to its track record and growing earnings. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 First Bancshares analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.
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