SB Financial Group, Inc. (NASDAQ:SBFG) stock is about to trade ex-dividend in three days. You will need to purchase shares before the 6th of August to receive the dividend, which will be paid on the 21st of August.
SB Financial Group's next dividend payment will be US$0.10 per share, on the back of last year when the company paid a total of US$0.40 to shareholders. Based on the last year's worth of payments, SB Financial Group has a trailing yield of 3.2% on the current stock price of $12.42. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. SB Financial Group is paying out just 25% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see SB Financial Group earnings per share are up 7.5% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, SB Financial Group has increased its dividend at approximately 1.1% a year on average.
To Sum It Up
Has SB Financial Group got what it takes to maintain its dividend payments? SB Financial Group has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, SB Financial Group looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
While it's tempting to invest in SB Financial Group for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 4 warning signs for SB Financial Group 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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