Guaranty Bancshares' (NYSE:GNTY) Upcoming Dividend Will Be Larger Than Last Year's

Guaranty Bancshares, Inc.'s (NYSE:GNTY) periodic dividend will be increasing on the 10th of April to $0.24, with investors receiving 4.3% more than last year's $0.23. This takes the annual payment to 3.0% of the current stock price, which is about average for the industry.

View our latest analysis for Guaranty Bancshares

Guaranty Bancshares' Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Guaranty Bancshares has established itself as a dividend paying company, given its 7-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 36%shows that Guaranty Bancshares would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to fall by 8.4%. However, as estimated by analysts, the future payout ratio could be 41% over the same time period, which we think the company can easily maintain.

Guaranty Bancshares Doesn't Have A Long Payment History

Guaranty Bancshares' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.473 in 2017 to the most recent total annual payment of $0.92. This implies that the company grew its distributions at a yearly rate of about 10.0% over that duration. Guaranty Bancshares has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

The Dividend Has Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Guaranty Bancshares has seen EPS rising for the last five years, at 10.0% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Guaranty Bancshares' prospects of growing its dividend payments in the future.

Guaranty Bancshares Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Guaranty Bancshares has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Guaranty Bancshares not quite the opportunity you were looking for? Why not check out our selection of top 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.