Bank of South Carolina (NASDAQ:BKSC) Is Due To Pay A Dividend Of $0.17

The board of Bank of South Carolina Corporation (NASDAQ:BKSC) has announced that it will pay a dividend of $0.17 per share on the 31st of July. This means the annual payment is 4.9% 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 Expected To Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Having distributed dividends for at least 10 years, Bank of South Carolina has a long history of paying out a part of its earnings to shareholders. Based on Bank of South Carolina's last earnings report, the payout ratio is at a decent 56%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 4.8% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 56% by next year, which we think can be pretty sustainable going forward.

Bank of South Carolina Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.364, compared to the most recent full-year payment of $0.68. This works out to be a compound annual growth rate (CAGR) of approximately 6.5% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings has been rising at 4.8% per annum over the last five years, which admittedly is a bit slow. The company has been growing at a pretty soft 4.8% per annum, and is paying out quite a lot of its earnings to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

Bank of South Carolina Looks Like A Great Dividend Stock

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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Bank of South Carolina that you should be aware of before investing. Is Bank of South Carolina 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.