Guaranty Bancshares (NYSE:GNTY) Will Pay A Dividend Of $0.24

Guaranty Bancshares, Inc. (NYSE:GNTY) has announced that it will pay a dividend of $0.24 per share on the 8th of January. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.

See our latest analysis for Guaranty Bancshares

Guaranty Bancshares' Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Having paid out dividends for 8 years, Guaranty Bancshares has a good history of paying out a part of its earnings to shareholders. Based on Guaranty Bancshares' last earnings report, the payout ratio is at a decent 40%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 19.7%. Analysts forecast the future payout ratio could be 38% over the same time horizon, which is a number we think the company can maintain.

Guaranty Bancshares Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. The annual payment during the last 8 years was $0.473 in 2016, and the most recent fiscal year payment was $0.96. This works out to be a compound annual growth rate (CAGR) of approximately 9.3% a year over that time. 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.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. However, Guaranty Bancshares has only grown its earnings per share at 4.0% per annum over the past five years. If Guaranty Bancshares is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

In Summary

Overall, we think Guaranty Bancshares is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Guaranty Bancshares that you should be aware of before investing. 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.