SmartFinancial's (NYSE:SMBK) Dividend Will Be $0.08

SmartFinancial, Inc. (NYSE:SMBK) will pay a dividend of $0.08 on the 27th of November. This payment means the dividend yield will be 1.0%, which is below the average for the industry.

Check out our latest analysis for SmartFinancial

SmartFinancial's Dividend Forecasted To Be Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

SmartFinancial has a good history of paying out dividends, with its current track record at 5 years. While past data isn't a guarantee for the future, SmartFinancial's latest earnings report puts its payout ratio at 4.1%, showing that the company can pay out its dividends comfortably.

Over the next 3 years, EPS is forecast to expand by 52.7%. Analysts forecast the future payout ratio could be 14% over the same time horizon, which is a number we think the company can maintain.

SmartFinancial Doesn't Have A Long Payment History

SmartFinancial's 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. Since 2019, the dividend has gone from $0.20 total annually to $0.32. This works out to be a compound annual growth rate (CAGR) of approximately 9.9% 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.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately, SmartFinancial's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. While growth may be thin on the ground, SmartFinancial could always pay out a higher proportion of earnings to increase shareholder returns.

In Summary

Overall, a consistent dividend is a good thing, and we think that SmartFinancial has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic 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. 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.