Sierra Bancorp (NASDAQ:BSRR) Is Due To Pay A Dividend Of $0.24

Sierra Bancorp's (NASDAQ:BSRR) investors are due to receive a payment of $0.24 per share on 12th of November. This means that the annual payment will be 3.5% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Sierra Bancorp

Sierra Bancorp's Dividend Forecasted To Be Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Sierra Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Sierra Bancorp's payout ratio sits at 9.0%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 1.4% over the next 3 years. Analysts forecast the future payout ratio could be 38% over the same time horizon, which is a number we think the company can maintain.

Sierra Bancorp Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.32 in 2014 to the most recent total annual payment of $0.96. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

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. However, Sierra Bancorp has only grown its earnings per share at 2.6% per annum over the past five years. If Sierra Bancorp is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Sierra Bancorp Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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. Just as an example, we've come across 2 warning signs for Sierra Bancorp you should be aware of, and 1 of them is a bit concerning. If you are a dividend investor, you might also want to look at our curated list of high yield 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.