Seacoast Banking Corporation of Florida (NASDAQ:SBCF) Has Announced A Dividend Of $0.18

Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend of $0.18 per share on the 29th of March. This payment means that the dividend yield will be 3.0%, which is around the industry average.

View our latest analysis for Seacoast Banking Corporation of Florida

Seacoast Banking Corporation of Florida's Payment Expected To Have Solid Earnings Coverage

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

Seacoast Banking Corporation of Florida is just starting to establish itself as being able to pay dividends to shareholders, given its short 3-year history of distributing earnings. Diving into the company's earnings report, the payout ratio is set at 57%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.

Looking forward, EPS is forecast to rise by 60.0% over the next 3 years. Analysts estimate the future payout ratio will be 44% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Seacoast Banking Corporation of Florida Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The annual payment during the last 3 years was $0.52 in 2021, and the most recent fiscal year payment was $0.72. This means that it has been growing its distributions at 11% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Seacoast Banking Corporation of Florida May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. Over the past five years, it looks as though Seacoast Banking Corporation of Florida's EPS has declined at around 2.3% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern.

An additional note is that the company has been raising capital by issuing stock equal to 17% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Our Thoughts On Seacoast Banking Corporation of Florida's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Seacoast Banking Corporation of Florida's payments, as there could be some issues with sustaining them into the future. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Seacoast Banking Corporation of Florida that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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