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Only 4 Days Left To Cash In On Southwest Georgia Financial Corporation (NYSEMKT:SGB) Dividend, Should Investors Buy?

Heidi Stubbs

Shares of Southwest Georgia Financial Corporation (NYSEMKT:SGB) will begin trading ex-dividend in 4 days. To qualify for the dividend check of US$0.12 per share, investors must have owned the shares prior to 10 September 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Southwest Georgia Financial and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

View our latest analysis for Southwest Georgia Financial

5 questions to ask before buying a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • Is their annual yield among the top 25% of dividend payers?
  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
  • Has dividend per share risen in the past couple of years?
  • Does earnings amply cover its dividend payments?
  • Will the company be able to keep paying dividend based on the future earnings growth?
AMEX:SGB Historical Dividend Yield September 5th 18

How well does Southwest Georgia Financial fit our criteria?

Southwest Georgia Financial has a trailing twelve-month payout ratio of 28.3%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from Southwest Georgia Financial fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

In terms of its peers, Southwest Georgia Financial generates a yield of 2.2%, which is on the low-side for Banks stocks.

Next Steps:

After digging a little deeper into Southwest Georgia Financial’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three key aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for SGB’s future growth? Take a look at our free research report of analyst consensus for SGB’s outlook.
  2. Valuation: What is SGB 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 SGB is currently mispriced by the market.
  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.