Shares of Southern National Bancorp of Virginia Inc (NASDAQ:SONA) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.08 per share, investors must have owned the shares prior to 10 November 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Is this future income stream a compelling catalyst for dividend investors to think about SONA as an investment today? Let’s take a look at SONA’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Southern National Bancorp of Virginia
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it the top 25% annual dividend yield payer?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Southern National Bancorp of Virginia fit our criteria?
The current payout ratio for the stock is 85.62%, which means that the dividend is covered by earnings. Analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect to see moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Unfortunately, it is really too early to view Southern National Bancorp of Virginia as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Southern National Bancorp of Virginia produces a yield of 1.96%, which is on the low-side for banks stocks.
What this means for you:
Are you a shareholder? You may be wondering why Southern National Bancorp of Virginia is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be worth exploring other income stocks as alternatives to SONA or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Now you know to keep in mind the reason why investors should be careful investing in SONA for the dividend. But if you are not exclusively a dividend investor, SONA could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Dig deeper in our latest free fundmental analysis to explore other aspects of SONA.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.