Sierra Bancorp's (NASDAQ:BSRR) Dividend Will Be $0.23
Sierra Bancorp (NASDAQ:BSRR) has announced that it will pay a dividend of $0.23 per share on the 14th of November. This means the annual payment is 4.9% of the current stock price, which is above the average for the industry.
View our latest analysis for Sierra Bancorp
Sierra Bancorp's Payment Expected To Have Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, Sierra Bancorp has a long history of paying out a part of its earnings to shareholders. Based on Sierra Bancorp's last earnings report, the payout ratio is at a decent 38%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next year, EPS is forecast to expand by 3.2%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 41% by next year, which is in a pretty sustainable range.
Sierra Bancorp Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the dividend has gone from $0.24 total annually to $0.92. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
We Could See Sierra Bancorp's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Sierra Bancorp has been growing its earnings per share at 7.6% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Sierra Bancorp's prospects of growing its dividend payments in the future.
Sierra Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend 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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 Sierra Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.
