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Stock Yards Bancorp, Inc. (NASDAQ:SYBT) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Stock Yards Bancorp, Inc. (NASDAQ:SYBT) stock is about to trade ex-dividend in 4 days. Ex-dividend means that investors that purchase the stock on or after the 11th of March will not receive this dividend, which will be paid on the 1st of April.
Stock Yards Bancorp's next dividend payment will be US$0.27 per share, and in the last 12 months, the company paid a total of US$1.08 per share. Last year's total dividend payments show that Stock Yards Bancorp has a trailing yield of 2.0% on the current share price of $53.85. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Stock Yards Bancorp
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Stock Yards Bancorp paid out a comfortable 41% of its profit last year.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Stock Yards Bancorp earnings per share are up 9.2% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Stock Yards Bancorp has lifted its dividend by approximately 9.1% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
To Sum It Up
Has Stock Yards Bancorp got what it takes to maintain its dividend payments? Stock Yards Bancorp has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, Stock Yards Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Stock Yards Bancorp for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 2 warning signs for Stock Yards Bancorp that you should be aware of before investing in their shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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This article by Simply Wall St is general in nature. 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.
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About NasdaqGS:SYBT
Stock Yards Bancorp
Operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States.
Flawless balance sheet established dividend payer.