Southern Missouri Bancorp's (NASDAQ:SMBC) Dividend Will Be $0.21

Southern Missouri Bancorp, Inc.'s (NASDAQ:SMBC) investors are due to receive a payment of $0.21 per share on 31st of May. This means the annual payment will be 2.3% of the current stock price, which is lower than the industry average.

View our latest analysis for Southern Missouri Bancorp

Southern Missouri Bancorp's Payment Expected To Have Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end.

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 records don't necessarily translate into future results, the company's payout ratio of 17% also shows that Southern Missouri Bancorp is able to comfortably pay dividends.

Looking forward, earnings per share is forecast to rise by 4.5% over the next year. If the dividend continues on this path, the future payout ratio could be 24% by next year, which we think can be pretty sustainable going forward.

Southern Missouri Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.30 in 2013, and the most recent fiscal year payment was $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

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 12% per year over the past five years. Southern Missouri Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We should note that Southern Missouri Bancorp has issued stock equal to 21% of shares outstanding. 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

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. 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. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Southern Missouri Bancorp that investors should take into consideration. 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.