Sierra Bancorp (NASDAQ:BSRR) Is Paying Out A Dividend Of $0.23

Sierra Bancorp (NASDAQ:BSRR) has announced that it will pay a dividend of $0.23 per share on the 12th of May. Based on this payment, the dividend yield on the company's stock will be 5.8%, which is an attractive boost to shareholder returns.

View our latest analysis for Sierra Bancorp

Sierra Bancorp's Payment Expected To Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Sierra Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Sierra Bancorp's last earnings report, the payout ratio is at a decent 41%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS could expand by 8.6% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.

Sierra Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.24, compared to the most recent full-year payment of $0.92. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Sierra Bancorp Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Sierra Bancorp has seen EPS rising for the last five years, at 8.6% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Sierra Bancorp 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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Sierra Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.