Stellar Bancorp's (NYSE:STEL) Dividend Will Be $0.13
Stellar Bancorp, Inc.'s (NYSE:STEL) investors are due to receive a payment of $0.13 per share on 29th of December. This payment means the dividend yield will be 2.0%, which is below the average for the industry.
View our latest analysis for Stellar Bancorp
Stellar Bancorp's 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.
Stellar Bancorp has a short history of paying out dividends, with its current track record at only 4 years. Diving into the company's earnings report, the payout ratio is set at 26%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.
Over the next 3 years, EPS is forecast to fall by 1.4%. However, as estimated by analysts, the future payout ratio could be 25% over the same time period, which we think the company can easily maintain.
Stellar Bancorp's Dividend Has Lacked Consistency
Even in its short history, we have seen the dividend cut. The dividend has gone from an annual total of $0.40 in 2019 to the most recent total annual payment of $0.52. This works out to be a compound annual growth rate (CAGR) of approximately 6.8% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.
Stellar Bancorp May Find It Hard To Grow The Dividend
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Unfortunately, Stellar Bancorp's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.
Our Thoughts On Stellar Bancorp's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Stellar Bancorp has been making. This company is not in the top tier of income providing stocks.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for Stellar Bancorp you should be aware of, and 1 of them shouldn't be ignored. Is Stellar Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.
