First Guaranty Bancshares (NASDAQ:FGBI) Has Affirmed Its Dividend Of $0.16

First Guaranty Bancshares, Inc.'s (NASDAQ:FGBI) investors are due to receive a payment of $0.16 per share on 31st of March. Based on this payment, the dividend yield will be 3.1%, which is fairly typical for the industry.

See our latest analysis for First Guaranty Bancshares

First Guaranty Bancshares' Payment Expected To Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much.

First Guaranty Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 26%, which means that First Guaranty Bancshares would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to fall by 25.4%. Fortunately, analysts forecast the future payout ratio to be 33% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

First Guaranty Bancshares 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. Since 2013, the annual payment back then was $0.437, compared to the most recent full-year payment of $0.64. This means that it has been growing its distributions at 3.9% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. First Guaranty Bancshares has impressed us by growing EPS at 18% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for First Guaranty Bancshares' prospects of growing its dividend payments in the future.

We Really Like First Guaranty Bancshares' Dividend

Overall, we like to see the dividend staying consistent, and we think First Guaranty Bancshares might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 1 warning sign for First Guaranty Bancshares that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.