ServisFirst Bancshares, Inc. (NYSE:SFBS) Passed Our Checks, And It's About To Pay A US$0.335 Dividend

Readers hoping to buy ServisFirst Bancshares, Inc. (NYSE:SFBS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase ServisFirst Bancshares' shares before the 1st of April to receive the dividend, which will be paid on the 9th of April.

The company's next dividend payment will be US$0.335 per share. Last year, in total, the company distributed US$1.34 to shareholders. Based on the last year's worth of payments, ServisFirst Bancshares has a trailing yield of 1.6% on the current stock price of US$82.89. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see ServisFirst Bancshares paying out a modest 30% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

See our latest analysis for ServisFirst Bancshares

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see ServisFirst Bancshares earnings per share are up 8.4% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, ServisFirst Bancshares has lifted its dividend by approximately 30% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is ServisFirst Bancshares an attractive dividend stock, or better left on the shelf? ServisFirst Bancshares has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, ServisFirst Bancshares looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks ServisFirst Bancshares is facing. Every company has risks, and we've spotted 1 warning sign for ServisFirst Bancshares you should know about.

If you're in the market for strong dividend payers, we recommend checking 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.