Seacoast Banking Corporation of Florida (NASDAQ:SBCF) Is Due To Pay A Dividend Of $0.18
The board of Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend on the 30th of June, with investors receiving $0.18 per share. Based on this payment, the dividend yield will be 3.4%, which is fairly typical for the industry.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Seacoast Banking Corporation of Florida's stock price has reduced by 35% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield.
View our latest analysis for Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Seacoast Banking Corporation of Florida is just starting to establish itself as being able to pay dividends to shareholders, given its short 2-year history of distributing earnings. 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 31.3%. If the dividend continues along recent trends, we estimate the future payout ratio will be 45%, 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
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2021, the dividend has gone from $0.52 total annually to $0.72. This implies that the company grew its distributions at a yearly rate of about 18% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
Seacoast Banking Corporation of Florida May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. However, Seacoast Banking Corporation of Florida's EPS was effectively flat over the past five years, which could stop the company from paying more every year.
We should note that Seacoast Banking Corporation of Florida has issued stock equal to 38% of shares outstanding. 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, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We would probably look elsewhere for an income investment.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 4 warning signs for Seacoast Banking Corporation of Florida that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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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