Southside Bancshares (NYSE:SBSI) Is Due To Pay A Dividend Of $0.36

Southside Bancshares, Inc. (NYSE:SBSI) has announced that it will pay a dividend of $0.36 per share on the 4th of December. The dividend yield will be 5.0% based on this payment which is still above the industry average.

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Southside Bancshares' Payment Expected To Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Southside Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Southside Bancshares' payout ratio of 62% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 53.8% over the next 3 years. The future payout ratio could be 49% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

See our latest analysis for Southside Bancshares

Southside Bancshares Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.903 in 2015 to the most recent total annual payment of $1.44. This means that it has been growing its distributions at 4.8% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Earnings have grown at around 2.1% a year for the past five years, which isn't massive but still better than seeing them shrink. Growth of 2.1% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

Southside Bancshares Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Southside Bancshares analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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