SmartFinancial (NYSE:SMBK) Has Affirmed Its Dividend Of $0.08

The board of SmartFinancial, Inc. (NYSE:SMBK) has announced that it will pay a dividend on the 25th of August, with investors receiving $0.08 per share. Including this payment, the dividend yield on the stock will be 0.9%, which is a modest boost for shareholders' returns.

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SmartFinancial'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.

SmartFinancial has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 13% also shows that SmartFinancial is able to comfortably pay dividends.

Looking forward, earnings per share is forecast to rise by 16.2% over the next year. If the dividend continues on this path, the future payout ratio could be 13% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for SmartFinancial

SmartFinancial Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2019, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.32. This works out to be a compound annual growth rate (CAGR) of approximately 8.1% a year over that time. SmartFinancial has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. SmartFinancial has seen EPS rising for the last five years, at 10% per annum. SmartFinancial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

SmartFinancial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for SmartFinancial for free with public analyst estimates for the company. Is SmartFinancial 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.