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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Bank of South Carolina Corporation (NASDAQ:BKSC) is about to trade ex-dividend in the next four days. You can purchase shares before the 5th of April in order to receive the dividend, which the company will pay on the 30th of April.
Bank of South Carolina's next dividend payment will be US$0.27 per share. Last year, in total, the company distributed US$0.68 to shareholders. Based on the last year's worth of payments, Bank of South Carolina has a trailing yield of 3.0% on the current stock price of $22.4. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Bank of South Carolina paid out 56% of its earnings to investors last year, a normal payout level for most businesses.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Bank of South Carolina earnings per share are up 5.3% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Bank of South Carolina has delivered 8.5% dividend growth per year on average over the past 10 years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Should investors buy Bank of South Carolina for the upcoming dividend? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.
So if you want to do more digging on Bank of South Carolina, you'll find it worthwhile knowing the risks that this stock faces. To help with this, we've discovered 2 warning signs for Bank of South Carolina (1 is concerning!) that you ought to be aware of before buying the shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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