The board of Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend of $0.18 per share on the 31st of December. This payment means that the dividend yield will be 2.6%, which is around the industry average.
View our latest analysis for Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida's Dividend Forecasted To Be Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much.
Having paid out dividends for only 3 years, Seacoast Banking Corporation of Florida does not have much of a history being a dividend paying company. Taking data from Seacoast Banking Corporation of Florida's last earnings report, the payout ratio is at a decent 52%, meaning that the company is able to pay out its dividend with some room to spare.
Over the next 3 years, EPS is forecast to expand by 35.9%. Analysts estimate the future payout ratio will be 44% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Seacoast Banking Corporation of Florida Doesn't Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2021, the dividend has gone from $0.52 total annually to $0.72. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend's Growth Prospects Are Limited
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Over the past five years, it looks as though Seacoast Banking Corporation of Florida's EPS has declined at around 2.3% a year. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Our Thoughts On Seacoast Banking Corporation of Florida'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 Seacoast Banking Corporation of Florida has been making. We would be a touch cautious of relying on this stock primarily for the dividend income.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Seacoast Banking Corporation of Florida that investors should take into consideration. Is Seacoast Banking Corporation of Florida not quite the opportunity you were looking for? Why not check out our selection of top 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.