Seacoast Banking Corporation of Florida's (NASDAQ:SBCF) Dividend Will Be $0.18
Seacoast Banking Corporation of Florida (NASDAQ:SBCF) will pay a dividend of $0.18 on the 29th of December. This payment means that the dividend yield will be 3.1%, which is around the industry average.
View our latest analysis for Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida's Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
Having paid out dividends for only 3 years, Seacoast Banking Corporation of Florida does not have much of a history being a dividend paying company. Based on Seacoast Banking Corporation of Florida's last earnings report, calculating for its payout ratio equates to 57%, which means that the company covered its last dividend with comfortable room to spare.
The next 3 years are set to see EPS grow by 44.4%. The future payout ratio could be 46% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Seacoast Banking Corporation of Florida Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. Since 2020, the annual payment back then was $0.52, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. 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.
Seacoast Banking Corporation of Florida May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. In the last five years, Seacoast Banking Corporation of Florida's earnings per share has shrunk at approximately 3.3% per annum. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.
An additional note is that the company has been raising capital by issuing stock equal to 39% 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.
Our Thoughts On Seacoast Banking Corporation of Florida's Dividend
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 low payout ratio is a redeeming feature, but generally we are not too happy with the payments Seacoast Banking Corporation of Florida has been making. We would be a touch cautious of relying on this stock primarily for the dividend income.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 4 warning signs for Seacoast Banking Corporation of Florida that investors should know about before committing capital to this stock. 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.
