Yahoo Finance SmartFinancial (NASDAQ:SMBK) Has Announced That It Will Be Increasing Its Dividend To $0.08
SmartFinancial, Inc. (NASDAQ:SMBK) has announced that it will be increasing its periodic dividend on the 27th of February to $0.08, which will be 14% higher than last year's comparable payment amount of $0.07. Even though the dividend went up, the yield is still quite low at only 1.0%.
View our latest analysis for SmartFinancial
SmartFinancial's Dividend Forecasted To Be Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive.
SmartFinancial has a short history of paying out dividends, with its current track record at only 3 years. Despite the company's shorter dividend history however, calculating for its payout ratio of 11% shows that SmartFinancial is able to comfortably pay dividends.
Over the next 3 years, EPS is forecast to expand by 12.5%. Analysts forecast the future payout ratio could be 12% over the same time horizon, which is a number we think the company can maintain.
SmartFinancial Is Still Building Its Track Record
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2020, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.28. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that SmartFinancial has grown earnings per share at 35% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
SmartFinancial Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that SmartFinancial is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 SmartFinancial 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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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.
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