Stock Yards Bancorp's (NASDAQ:SYBT) Dividend Will Be $0.29

The board of Stock Yards Bancorp, Inc. (NASDAQ:SYBT) has announced that it will pay a dividend on the 30th of December, with investors receiving $0.29 per share. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.

Check out the opportunities and risks within the US Banks industry.

Stock Yards Bancorp's Earnings Will Easily Cover The Distributions

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 distributed dividends for at least 10 years, Stock Yards Bancorp has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Stock Yards Bancorp's payout ratio of 36% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 38.1%. The future payout ratio could be 31% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Stock Yards Bancorp Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.507 in 2012 to the most recent total annual payment of $1.16. This means that it has been growing its distributions at 8.6% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

We Could See Stock Yards Bancorp's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Stock Yards Bancorp has impressed us by growing EPS at 9.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Stock Yards Bancorp's prospects of growing its dividend payments in the future.

An additional note is that the company has been raising capital by issuing stock equal to 10% 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.

We Really Like Stock Yards Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Stock Yards Bancorp might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 2 warning signs for Stock Yards Bancorp that investors should take into consideration. 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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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.