First Guaranty Bancshares (NASDAQ:FGBI) Is Due To Pay A Dividend Of $0.16
The board of First Guaranty Bancshares, Inc. (NASDAQ:FGBI) has announced that it will pay a dividend on the 29th of December, with investors receiving $0.16 per share. Based on this payment, the dividend yield on the company's stock will be 6.5%, which is an attractive boost to shareholder returns.
View our latest analysis for First Guaranty Bancshares
First Guaranty Bancshares' Earnings Will Easily Cover The Distributions
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
First Guaranty Bancshares has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on First Guaranty Bancshares' last earnings report, the payout ratio is at a decent 65%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share is forecast to fall by 16.0% over the next 3 years. Fortunately, the future payout ratio could reach 92% in the same 3 years as estimated by analysts, which is on the higher side, but certainly still feasible.
First Guaranty Bancshares Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.437 in 2013 to the most recent total annual payment of $0.64. This implies that the company grew its distributions at a yearly rate of about 3.9% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Dividend Growth May Be Hard To Come By
The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. In the last five years, First Guaranty Bancshares' earnings per share has shrunk at approximately 6.7% per annum. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While First Guaranty Bancshares is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We don't think First Guaranty Bancshares is a great stock to add to your portfolio if income is your focus.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, First Guaranty Bancshares has 4 warning signs (and 1 which is concerning) we think you should know about. Is First Guaranty Bancshares not quite the opportunity you were looking for? Why not check out our selection of top 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.
