Bank of South Carolina (NASDAQ:BKSC) Has Re-Affirmed Its Dividend Of US$0.17

The board of Bank of South Carolina Corporation (NASDAQ:BKSC) has announced that it will pay a dividend of US$0.17 per share on the 29th of October. This means the annual payment is 3.9% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Bank of South Carolina

Bank of South Carolina's Payment Has Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Prior to this announcement, Bank of South Carolina's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 6.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 63% by next year, which is in a pretty sustainable range.

Bank of South Carolina Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2011, the dividend has gone from US$0.33 to US$0.68. This works out to be a compound annual growth rate (CAGR) of approximately 7.5% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

We Could See Bank of South Carolina's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Bank of South Carolina has seen EPS rising for the last five years, at 6.5% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Bank of South Carolina's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on Bank of South Carolina management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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