Southern States Bancshares (NASDAQ:SSBK) Has Affirmed Its Dividend Of $0.09

Simply Wall St · 07/22/2024 12:39

The board of Southern States Bancshares, Inc. (NASDAQ:SSBK) has announced that it will pay a dividend on the 12th of August, with investors receiving $0.09 per share. This payment means the dividend yield will be 1.2%, which is below the average for the industry.

See our latest analysis for Southern States Bancshares

Southern States Bancshares' 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.

Southern States Bancshares is just starting to establish itself as being able to pay dividends to shareholders, given its short 3-year history of distributing earnings. Despite the company's shorter dividend history however, calculating for its payout ratio of 9.8% shows that Southern States Bancshares is able to comfortably pay dividends.

The next year is set to see EPS grow by 0.6%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 10% by next year, which is in a pretty sustainable range.

historic-dividend
NasdaqGS:SSBK Historic Dividend July 22nd 2024

Southern States Bancshares Is Still Building Its Track Record

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The most recent annual payment of $0.36 is about the same as the annual payment 3 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

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. It's encouraging to see that Southern States Bancshares has been growing its earnings per share at 25% a year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

Southern States Bancshares Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Southern States Bancshares that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.