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 of $0.29 per share on the 3rd of July. This payment means the dividend yield will be 2.7%, which is below the average for the industry.

View our latest analysis for Stock Yards Bancorp

Stock Yards Bancorp's Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Stock Yards Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 29%, which means that Stock Yards Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 5.9% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 34%, which would be comfortable for the company to continue in the future.

Stock Yards Bancorp Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from $0.507 total annually to $1.16. This implies that the company grew its distributions at a yearly rate of about 8.6% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Stock Yards Bancorp has impressed us by growing EPS at 17% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Stock Yards Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Stock Yards Bancorp might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. 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. All of these factors considered, we think this has solid potential as a dividend stock.

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. For example, we've picked out 1 warning sign for Stock Yards Bancorp that investors should know about before committing capital to this stock. 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.