SmartFinancial's (NASDAQ:SMBK) Dividend Will Be $0.08
The board of SmartFinancial, Inc. (NASDAQ:SMBK) has announced that it will pay a dividend of $0.08 per share on the 27th of November. Including this payment, the dividend yield on the stock will be 1.5%, which is a modest boost for shareholders' returns.
View our latest analysis for SmartFinancial
SmartFinancial's Earnings Will Easily Cover The Distributions
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Having paid out dividends for only 4 years, SmartFinancial does not have much of a history being a dividend paying company. Despite the company's shorter dividend history however, calculating for its payout ratio of 15% shows that SmartFinancial is able to comfortably pay dividends.
The next 3 years are set to see EPS grow by 4.2%. Analysts forecast the future payout ratio could be 17% over the same time horizon, which is a number we think the company can maintain.
SmartFinancial 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 4 years, which isn't that long in the grand scheme of things. The dividend has gone from an annual total of $0.20 in 2019 to the most recent total annual payment of $0.32. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. SmartFinancial has impressed us by growing EPS at 16% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
SmartFinancial 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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for SmartFinancial for free with public 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.
