Summit Financial Group, Inc. SMMF announced a quarterly cash dividend of 22 cents per share, marking an increase of 10% from the prior payout. The dividend will be paid out on Sep 29 to shareholders of record on Sep 15.
Prior to this hike, the company increased its dividend by 11.1% in August 2022. SMMF has raised its quarterly dividend five times in the last five years. Also, it has a five-year annualized dividend growth of 8.68%. Currently, its payout ratio is 21% of earnings.
Considering the last day’s closing price of $24.74, SMMF’s dividend yield currently stands at 3.56%, which is above the industry’s average of 2.93%. Apart from attracting investors, this dividend yield represents a steady income stream.
Summit Financial pays dividends regularly. Also, the company has a share repurchase program in place. In first-quarter 2020, it announced a buyback program of up to 750,000 shares. As of Jun 30, 2023, it repurchased 323,577 shares. We believe such disbursements highlight the company’s operational strength and commitment to enhancing shareholders’ wealth.
Summit Financial has been growing through acquisitions as well. In April 2023, it acquired PSB Holding Corp. and its subsidiary, Provident State Bank, Inc. Expanded geographical footprints and diversification stemming from such buyouts will likely support the company’s financials.
Over the past six months, shares of SMMF have lost 2.8% compared with a decline of 10.5% of the industry it belongs to.
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Summit Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Companies Taking Similar Steps
Over the past month, Bank OZK OZK and The PNC Financial Services Group, Inc. PNC announced increases in their quarterly dividends.
Bank OZK announced a quarterly cash dividend of 36 cents per share, reflecting a rise of 2.9% from the prior payout. The dividend was paid out on Jul 21 to shareholders of record as of Jul 14, 2023.
This marks 52 consecutive quarters of dividend hikes by Bank OZK. Prior to this, OZK raised its dividend by 2.9% to 35 cents per share in April 2023. We believe that such disbursements highlight the company’s operational strength and commitment to enhancing shareholders' wealth.
After passing the 2023 stress test, PNC Financial announced that it expected its Stress Capital Buffer (SCB), effective from Oct 1, 2023, to decrease to 2.5% from 2.9%.
With a lower SCB, a company typically has higher flexibility to deploy capital in share buybacks and dividends. Accordingly, PNC announced a hike in its quarterly dividend. The company declared a quarterly cash dividend of $1.55 per share, marking an increase of 3.3% from the prior payout. The dividend was paid out on Aug 5 to shareholders of record as of Jul 17, 2023.
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