SB Financial Group (NASDAQ:SBFG) Will Pay A Dividend Of $0.145

SB Financial Group, Inc. (NASDAQ:SBFG) will pay a dividend of $0.145 on the 22nd of November. This payment means that the dividend yield will be 2.8%, 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

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. Based on SB Financial Group's last earnings report, the payout ratio is at a decent 30%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 7.7% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 38%, which would be comfortable for the company to continue in the future.

SB Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.133 total annually to $0.56. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

SB Financial Group 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, SB Financial Group has only grown its earnings per share at 4.1% per annum over the past five years. While growth may be thin on the ground, SB Financial Group could always pay out a higher proportion of earnings to increase shareholder returns.

SB Financial Group Looks Like A Great Dividend Stock

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 distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, SB Financial Group has 2 warning signs (and 1 which is potentially serious) we think you should know about. 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.