SpareBank 1 SMN (OB:MING) Will Pay A Larger Dividend Than Last Year At NOK12.50

SpareBank 1 SMN's (OB:MING) dividend will be increasing from last year's payment of the same period to NOK12.50 on 28th of March. This makes the dividend yield about the same as the industry average at 6.8%.

Check out our latest analysis for SpareBank 1 SMN

SpareBank 1 SMN's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

SpareBank 1 SMN has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but SpareBank 1 SMN's payout ratio of 62% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 5.1% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 65% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

SpareBank 1 SMN Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was NOK1.75, compared to the most recent full-year payment of NOK12.50. This implies that the company grew its distributions at a yearly rate of about 22% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. SpareBank 1 SMN has impressed us by growing EPS at 11% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

In Summary

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. The company is paying out quite a high portion of earnings, but with those earnings growing quickly, this might resolve itself eventually. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for SpareBank 1 SMN for free with public analyst estimates for the company. Is SpareBank 1 SMN 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.