Southern States Bancshares (NASDAQ:SSBK) Has Announced A Dividend Of $0.09

Southern States Bancshares, Inc. (NASDAQ:SSBK) will pay a dividend of $0.09 on the 17th of November. This payment means the dividend yield will be 1.6%, which is below the average for the industry.

See our latest analysis for Southern States Bancshares

Southern States Bancshares' 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 States Bancshares is just starting to establish itself as being able to pay dividends to shareholders, given its short 2-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 9.3%, meaning that Southern States Bancshares may be able to sustain this dividend for future years if it continues on this earnings trend.

EPS is set to fall by 25.0% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 13%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

Southern States Bancshares Is Still Building Its Track Record

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The last annual payment of $0.36 was flat on the annual payment from2 years ago. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Southern States Bancshares has grown earnings per share at 26% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Southern States Bancshares 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. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. 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 in all, this checks a lot of the boxes we look for when choosing an income 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. As an example, we've identified 1 warning sign for Southern States Bancshares that you should be aware of before investing. 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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