SB Financial Group, Inc. (NASDAQ:SBFG) Looks Interesting, And It's About To Pay A Dividend

SB Financial Group, Inc. (NASDAQ:SBFG) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase SB Financial Group's shares on or after the 9th of August will not receive the dividend, which will be paid on the 23rd of August.

The company's upcoming dividend is US$0.14 a share, following on from the last 12 months, when the company distributed a total of US$0.56 per share to shareholders. Last year's total dividend payments show that SB Financial Group has a trailing yield of 3.3% on the current share price of US$16.81. If you buy this business for its dividend, you should have an idea of whether SB Financial Group's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for SB Financial Group

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see SB Financial Group paying out a modest 30% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit SB Financial Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that SB Financial Group's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, SB Financial Group has lifted its dividend by approximately 15% a year on average.

The Bottom Line

Is SB Financial Group an attractive dividend stock, or better left on the shelf? Earnings per share have been flat in recent years, although SB Financial Group reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, SB Financial Group looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in SB Financial Group for the dividends alone, you should always be mindful of the risks involved. For example - SB Financial Group has 1 warning sign we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com