SB Financial Group (NASDAQ:SBFG) Has Affirmed Its Dividend Of $0.145

SB Financial Group, Inc. (NASDAQ:SBFG) has announced that it will pay a dividend of $0.145 per share on the 22nd of November. This payment means that the dividend yield will be 3.0%, which is around the industry average.

See our latest analysis for SB Financial Group

SB Financial Group's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Having distributed dividends for at least 10 years, SB Financial Group has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 32%, which means that SB Financial Group would be able to pay its last dividend without pressure on the balance sheet.

The next year is set to see EPS grow by 4.6%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 34% by next year, which is in a pretty sustainable range.

SB Financial Group Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from $0.133 total annually to $0.56. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Dividend Growth May Be Hard To Achieve

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings have grown at around 2.4% a year for the past five years, which isn't massive but still better than seeing them shrink. While growth may be thin on the ground, SB Financial Group could always pay out a higher proportion of earnings to increase shareholder returns.

We Really Like SB Financial Group's Dividend

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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for SB Financial Group that you should be aware of before investing. 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.