Southern States Bancshares (NASDAQ:SSBK) Has Affirmed Its Dividend Of $0.09

The board of Southern States Bancshares, Inc. (NASDAQ:SSBK) has announced that it will pay a dividend on the 16th of February, with investors receiving $0.09 per share. The dividend yield is 1.3% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Southern States Bancshares

Southern States Bancshares' Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

Currently, Southern States Bancshares does not yet have a history of paying dividends out, with this being its first year doing so. While this gives us less confidence in Southern States Bancshares' long-term dividend potential, the company's payout ratio of 16%is a great sign for current shareholders, as this means that earnings greatly cover dividends.

EPS is set to fall by 30.0% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 17% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

Southern States Bancshares Is Still Building Its Track Record

It's not possible for us to make a backward looking judgement just based on a short payment history. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Southern States Bancshares has grown earnings per share at 21% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Southern States Bancshares Looks Like A Great Dividend Stock

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 earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Southern States Bancshares that investors should know about before committing capital to this stock. Is Southern States Bancshares not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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