Yahoo Finance Five Star Bancorp (NASDAQ:FSBC) Will Pay A Dividend Of $0.15
The board of Five Star Bancorp (NASDAQ:FSBC) has announced that it will pay a dividend of $0.15 per share on the 13th of February. Including this payment, the dividend yield on the stock will be 2.2%, which is a modest boost for shareholders' returns.
See our latest analysis for Five Star Bancorp
Five Star Bancorp'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.
Given that this is the first year that Five Star Bancorp is paying out a dividend, we are not yet able to make an analysis based on the company's dividend paying history. While this gives us less confidence in Five Star Bancorp's long-term dividend potential, the company's payout ratio of 24%is a great sign for current shareholders, as this means that earnings greatly cover dividends.
Looking forward, EPS is forecast to rise by 32.1% over the next 3 years. The future payout ratio could be 20% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Five Star Bancorp Is Still Building Its Track Record
It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
Dividend Growth Is Doubtful
The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. It's not great to see that Five Star Bancorp's earnings per share has fallen at approximately 6.1% per year over the past five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.
Our Thoughts On Five Star Bancorp's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. Overall, we don't think this company has the makings of a good income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Five Star Bancorp that investors should know about before committing capital to this stock. 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.
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