SB Financial Group (NASDAQ:SBFG) Has Announced That It Will Be Increasing Its Dividend To $0.15

SB Financial Group, Inc. (NASDAQ:SBFG) will increase its dividend from last year's comparable payment on the 30th of May to $0.15. The payment will take the dividend yield to 3.1%, which is in line with the average for the industry.

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

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

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. Using data from its latest earnings report, SB Financial Group's payout ratio sits at 25%, an extremely comfortable number that shows that it can pay its dividend.

Over the next year, EPS is forecast to expand by 14.4%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 33% by next year, which is in a pretty sustainable range.

View our latest analysis for SB Financial Group

SB Financial Group Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.152 in 2015, and the most recent fiscal year payment was $0.60. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

SB Financial Group May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. However, SB Financial Group has only grown its earnings per share at 4.7% per annum over the past five years. While EPS growth is quite low, SB Financial Group has the option to increase the payout ratio to return more cash to shareholders.

SB Financial Group Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for SB Financial Group that investors need to be conscious of moving forward. 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.