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Four Days Left Until First US Bancshares, Inc. (NASDAQ:FUSB) Trades Ex-Dividend

Simply Wall St

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that First US Bancshares, Inc. (NASDAQ:FUSB) is about to go ex-dividend in just four days. You will need to purchase shares before the 10th of September to receive the dividend, which will be paid on the 1st of October.

First US Bancshares's next dividend payment will be US$0.03 per share, and in the last 12 months, the company paid a total of US$0.12 per share. Calculating the last year's worth of payments shows that First US Bancshares has a trailing yield of 1.8% on the current share price of $6.6434. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether First US Bancshares can afford its dividend, and if the dividend could grow.

View our latest analysis for First US Bancshares

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. First US Bancshares paid out just 19% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit First US Bancshares paid out over the last 12 months.

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historic-dividend

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That explains why we're not overly excited about First US Bancshares's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. First US Bancshares's dividend payments per share have declined at 12% per year on average over the past 10 years, which is uninspiring.

To Sum It Up

Is First US Bancshares an attractive dividend stock, or better left on the shelf? First US Bancshares's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. It doesn't appear an outstanding opportunity, but could be worth a closer look.

With that being said, if dividends aren't your biggest concern with First US Bancshares, you should know about the other risks facing this business. To help with this, we've discovered 2 warning signs for First US Bancshares that you should be aware of before investing in their shares.

If you're in the market for dividend stocks, we recommend checking our list of top 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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