Seacoast Banking Corporation of Florida (NASDAQ:SBCF) Has Affirmed Its Dividend Of $0.18
The board of Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend on the 29th of September, with investors receiving $0.18 per share. This payment means that the dividend yield will be 2.7%, which is around the industry average.
View our latest analysis for Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida's Dividend Forecasted To Be Well Covered By Earnings
We aren't too impressed by dividend yields unless they can be sustained over time.
Seacoast Banking Corporation of Florida has a short history of paying out dividends, with its current track record at only 2 years. Taking data from Seacoast Banking Corporation of Florida's last earnings report, the payout ratio is at a decent 48%, meaning that the company is able to pay out its dividend with some room to spare.
The next year is set to see EPS grow by 20.7%. If the dividend continues along recent trends, we estimate the future payout ratio will be 50%, which is in the range that makes us comfortable with the sustainability of the dividend.
Seacoast Banking Corporation of Florida Is Still Building Its Track Record
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2021, the dividend has gone from $0.52 total annually to $0.72. This means that it has been growing its distributions at 18% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
Dividend Growth May Be Hard To Achieve
The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. Unfortunately, Seacoast Banking Corporation of Florida's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.
An additional note is that the company has been raising capital by issuing stock equal to 38% of shares outstanding in the last 12 months. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 4 warning signs for Seacoast Banking Corporation of Florida that investors should take into consideration. Is Seacoast Banking Corporation of Florida not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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