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On the 18 April 2019, Reliant Bancorp, Inc. (NASDAQ:RBNC) will be paying shareholders an upcoming dividend amount of US$0.09 per share. However, investors must have bought the company's stock before 05 April 2019 in order to qualify for the payment. That means you have only 2 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Reliant Bancorp's latest financial data to analyse its dividend attributes.
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does Reliant Bancorp fit our criteria?
The current trailing twelve-month payout ratio for the stock is 27%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect RBNC's payout to remain around the same level at 26% of its earnings. Assuming a constant share price, this equates to a dividend yield of 1.9%. Furthermore, EPS should increase to $1.51.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. The reality is that it is too early to consider Reliant Bancorp as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, Reliant Bancorp generates a yield of 1.6%, which is on the low-side for Banks stocks.
Taking all the above into account, Reliant Bancorp is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for RBNC’s future growth? Take a look at our free research report of analyst consensus for RBNC’s outlook.
- Valuation: What is RBNC worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether RBNC is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.