Southern States Bancshares (NASDAQ:SSBK) Will Pay A Dividend Of $0.09

Southern States Bancshares, Inc. (NASDAQ:SSBK) will pay a dividend of $0.09 on the 16th of May. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.

View our latest analysis for Southern States Bancshares

Southern States Bancshares' Earnings Will Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end.

Looking at its history, Southern States Bancshares does not yet have a history of paying out dividends, with this year being its first year of distribution. Based on Southern States Bancshares' last earnings report however, the payout ratio is at a comfortable 12%, meaning that the company 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 fall by 33.2%. Despite that, analysts estimate the future payout ratio could be 16% over the same time period, which is in a pretty comfortable range.

Southern States Bancshares Is Still Building Its Track Record

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. 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 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 21% 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.

Southern States Bancshares Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Southern States Bancshares might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 2 warning signs for Southern States Bancshares (of which 1 is significant!) you should know about. 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.