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Simmons First National Corporation (NASDAQ:SFNC): 2 Days To Buy Before The Ex-Dividend Date

Important news for shareholders and potential investors in Simmons First National Corporation (NASDAQ:SFNC): The dividend payment of US$0.15 per share will be distributed to shareholders on 05 October 2018, and the stock will begin trading ex-dividend at an earlier date, 13 September 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Simmons First National’s most recent financial data to examine its dividend characteristics in more detail.

Check out our latest analysis for Simmons First National

5 questions to ask before buying a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • Is it the top 25% annual dividend yield payer?

  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?

  • Has it increased its dividend per share amount over the past?

  • Does earnings amply cover its dividend payments?

  • Will it have the ability to keep paying its dividends going forward?

NasdaqGS:SFNC Historical Dividend Yield September 10th 18
NasdaqGS:SFNC Historical Dividend Yield September 10th 18

How well does Simmons First National fit our criteria?

The current trailing twelve-month payout ratio for the stock is 30.2%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 26.3%, leading to a dividend yield of around 2.0%. However, EPS should increase to $2.42, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. SFNC has increased its DPS from $0.38 to $0.60 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes SFNC a true dividend rockstar.

Compared to its peers, Simmons First National generates a yield of 1.9%, which is on the low-side for Banks stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Simmons First National as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three key aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SFNC’s future growth? Take a look at our free research report of analyst consensus for SFNC’s outlook.

  2. Valuation: What is SFNC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether SFNC is currently mispriced by the market.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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