Southern Missouri Bancorp's (NASDAQ:SMBC) Dividend Will Be $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 30th of November. This means the annual payment will be 2.1% of the current stock price, which is lower than the industry average.

View our latest analysis for Southern Missouri Bancorp

Southern Missouri Bancorp's Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Southern Missouri Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 21% also shows that Southern Missouri Bancorp is able to comfortably pay dividends.

The next year is set to see EPS grow by 8.8%. If the dividend continues along recent trends, we estimate the future payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

Southern Missouri Bancorp Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.30, compared to the most recent full-year payment of $0.84. This means that it has been growing its distributions at 11% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

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 7.7% 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.

We should note that Southern Missouri Bancorp has issued stock equal to 23% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Southern Missouri Bancorp that investors should take into consideration. Is Southern Missouri Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.