Yahoo Finance There's A Lot To Like About Southern States Bancshares' (NASDAQ:SSBK) Upcoming US$0.09 Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Southern States Bancshares, Inc. (NASDAQ:SSBK) is about to trade ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a 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. Meaning, you will need to purchase Southern States Bancshares' shares before the 2nd of August to receive the dividend, which will be paid on the 17th of August.
The company's next dividend payment will be US$0.09 per share. Last year, in total, the company distributed US$0.36 to shareholders. Based on the last year's worth of payments, Southern States Bancshares stock has a trailing yield of around 1.4% on the current share price of $25.02. If you buy this business for its dividend, you should have an idea of whether Southern States Bancshares's dividend is reliable and sustainable. As a result, readers should always check whether Southern States Bancshares has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Southern States Bancshares
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Southern States Bancshares has a low and conservative payout ratio of just 9.3% of its income after tax.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see how much of its profit Southern States Bancshares paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Southern States Bancshares has grown its earnings rapidly, up 26% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Southern States Bancshares's dividend payments are effectively flat on where they were two years ago.
The Bottom Line
From a dividend perspective, should investors buy or avoid Southern States Bancshares? Companies like Southern States Bancshares that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, Southern States Bancshares appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 1 warning sign for Southern States Bancshares and you should be aware of it before buying any 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.
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