SmartFinancial (NASDAQ:SMBK) Has Announced A Dividend Of $0.08

SmartFinancial, Inc.'s (NASDAQ:SMBK) investors are due to receive a payment of $0.08 per share on 27th of November. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.

View our latest analysis for SmartFinancial

SmartFinancial's Payment Expected To Have Solid Earnings Coverage

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

SmartFinancial is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 15%, meaning that SmartFinancial may be able to sustain this dividend for future years if it continues on this earnings trend.

Over the next 3 years, EPS is forecast to expand by 4.2%. The future payout ratio could be 17% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

SmartFinancial Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. Since 2019, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.32. This means that it has been growing its distributions at 12% per annum over that time. SmartFinancial has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. SmartFinancial has seen EPS rising for the last five years, at 16% per annum. SmartFinancial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

SmartFinancial 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for SmartFinancial for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.