Southern Missouri Bancorp (NASDAQ:SMBC) Has Announced A Dividend Of $0.21

The board of Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) has announced that it will pay a dividend of $0.21 per share on the 31st of August. This means the annual payment will be 1.8% of the current stock price, which is lower than the industry average.

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. Using data from its latest earnings report, Southern Missouri Bancorp's payout ratio sits at 22%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 35.6% over the next 3 years. Analysts forecast the future payout ratio could be 19% over the same time horizon, which is a number we think the company can maintain.

Southern Missouri Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.30, compared to the most recent full-year payment of $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. Southern Missouri Bancorp has impressed us by growing EPS at 7.3% per year over the past five years. 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. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.

We Really Like Southern Missouri Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Southern Missouri Bancorp might even raise payments in the future. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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 Southern Missouri Bancorp that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.