Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Simmons First National Corporation (NASDAQ:SFNC) is about to trade ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Simmons First National's shares before the 14th of December in order to receive the dividend, which the company will pay on the 2nd of January.
The company's next dividend payment will be US$0.20 per share, and in the last 12 months, the company paid a total of US$0.80 per share. Looking at the last 12 months of distributions, Simmons First National has a trailing yield of approximately 4.5% on its current stock price of $17.79. If you buy this business for its dividend, you should have an idea of whether Simmons First National's dividend is reliable and sustainable. So we need to investigate whether Simmons First National can afford its dividend, and if the dividend could grow.
See our latest analysis for Simmons First National
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Simmons First National's payout ratio is modest, at just 43% of profit.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Simmons First National, with earnings per share up 6.9% on average over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Simmons First National has lifted its dividend by approximately 6.7% 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.
The Bottom Line
Is Simmons First National worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Simmons First National more closely.
So while Simmons First National looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 1 warning sign for Simmons First National that you should be aware of before investing in their shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
普通讀者會知道我們喜歡Simply Wall St的股息,這就是爲什麼看到西蒙斯第一國民公司(納斯達克股票代碼:SFNC)即將在未來四天內進行除息交易令人興奮的原因。除息日通常設置爲記錄日期前一個工作日,即您必須作爲股東出現在公司賬簿上才能獲得股息的截止日期。除息日之所以如此,是因爲無論何時買入或賣出股票,交易都需要至少兩個工作日才能結算。因此,您可以在12月14日之前購買Simmons First National的股票,以獲得股息,該公司將在1月2日支付股息。
該公司的下一次股息將爲每股0.20美元,在過去的12個月中,該公司共支付了每股0.80美元。從過去12個月的分配情況來看,西蒙斯第一國民的追蹤收益率約爲4.5%,而目前的股價爲17.79美元。如果你收購這家企業是爲了分紅,你應該知道席夢思第一國民的股息是否可靠和可持續。因此,我們需要調查Simmons First National能否負擔得起股息,以及股息是否可以增加。