Shore Bancshares (NASDAQ:SHBI) Is Paying Out A Dividend Of $0.12

Shore Bancshares, Inc. (NASDAQ:SHBI) will pay a dividend of $0.12 on the 27th of February. Based on this payment, the dividend yield will be 2.9%, which is fairly typical for the industry.

See our latest analysis for Shore Bancshares

Shore Bancshares' Payment Expected To Have Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Shore Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Shore Bancshares' payout ratio of 36% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 52.6% over the next 3 years. The future payout ratio could be 28% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Shore Bancshares Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from $0.08 total annually to $0.48. This means that it has been growing its distributions at 20% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately, Shore Bancshares' earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. If Shore Bancshares is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Shore Bancshares Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Shore Bancshares analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.