Southern States Bancshares (NASDAQ:SSBK) Has Affirmed Its Dividend Of $0.09
The board of Southern States Bancshares, Inc. (NASDAQ:SSBK) has announced that it will pay a dividend of $0.09 per share on the 17th of August. This payment means the dividend yield will be 1.5%, which is below the average for the industry.
See our latest analysis for Southern States Bancshares
Southern States Bancshares' Dividend Forecasted To Be Well Covered By Earnings
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Southern States Bancshares is just starting to establish itself as being able to pay dividends to shareholders, given its short 2-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 4.7%, meaning that Southern States Bancshares may be able to sustain this dividend for future years if it continues on this earnings trend.
EPS is set to fall by 28.9% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 13%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Southern States Bancshares 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 2 years, which isn't that long in the grand scheme of things. There hasn't been much of a change in the dividend over the last 2 years. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Southern States Bancshares has impressed us by growing EPS at 27% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
We Really Like Southern States Bancshares' Dividend
Overall, we like to see the dividend staying consistent, and we think Southern States Bancshares might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in Southern States Bancshares stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
