Southern Missouri Bancorp (NASDAQ:SMBC) Has Affirmed Its Dividend Of $0.21

Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) has announced that it will pay a dividend of $0.21 per share on the 29th of February. Including this payment, the dividend yield on the stock will be 2.0%, which is a modest boost for shareholders' returns.

Check out our latest analysis for Southern Missouri Bancorp

Southern Missouri Bancorp's Dividend Forecasted To Be Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Having distributed dividends for at least 10 years, Southern Missouri Bancorp has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Southern Missouri Bancorp's latest earnings report puts its payout ratio at 22%, showing that the company can pay out its dividends comfortably.

Over the next year, EPS is forecast to expand by 11.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 22%, which is in the range that makes us comfortable with the sustainability of the dividend.

Southern Missouri Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.30 in 2014 to the most recent total annual payment of $0.84. This means that it has been growing its distributions at 11% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Southern Missouri Bancorp Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Southern Missouri Bancorp has seen EPS rising for the last five years, at 6.3% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Southern Missouri Bancorp's prospects of growing its dividend payments in the future.

An additional note is that the company has been raising capital by issuing stock equal to 23% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Southern Missouri Bancorp 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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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 Southern Missouri Bancorp 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.