Southern States Bancshares (NASDAQ:SSBK) Is Due To Pay A Dividend Of $0.09

The board of Southern States Bancshares, Inc. (NASDAQ:SSBK) has announced that it will pay a dividend on the 14th of February, with investors receiving $0.09 per share. The dividend yield is 1.1% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for Southern States Bancshares

Southern States Bancshares' Payment Expected To Have Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Having paid out dividends for only 3 years, Southern States Bancshares does not have much of a history being a dividend paying company. While it has a shorter history of paying out dividends, Southern States Bancshares' payout ratio of 10% is a great sign for current shareholders, as this means that earnings greatly cover dividends.

The next 3 years are set to see EPS grow by 29.8%. The future payout ratio could be 8.6% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Southern States Bancshares Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The payments haven't really changed that much since 3 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Southern States Bancshares has impressed us by growing EPS at 32% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

An additional note is that the company has been raising capital by issuing stock equal to 12% of shares outstanding in the last 12 months. 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.

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. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Southern States Bancshares management tenure, salary, and performance. 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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