Southern Missouri Bancorp (NASDAQ:SMBC) Is Increasing Its Dividend To $0.21

Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) will increase its dividend from last year's comparable payment on the 31st of August to $0.21. Despite this raise, the dividend yield of 1.6% is only a modest boost to shareholder returns.

View 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.

Southern Missouri Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Southern Missouri Bancorp's payout ratio sits at 14%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 20.3% over the next 3 years. Analysts estimate the future payout ratio will be 14% over the same time period, 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. Since 2012, the dividend has gone from $0.24 total annually to $0.84. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Southern Missouri Bancorp has been growing its earnings per share at 20% a 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.

We Really Like Southern Missouri Bancorp's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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. Is Southern Missouri Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.