A Comprehensive Analysis of the Bank's Dividend Performance and Sustainability
Servisfirst Bancshares Inc (SFBS, Financial) recently announced a dividend of $0.28 per share, payable on 2023-10-10, with the ex-dividend date set for 2023-09-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Servisfirst Bancshares Incs dividend performance and assess its sustainability.
Understanding Servisfirst Bancshares Inc's Business Model
Servisfirst Bancshares Inc is a bank holding company. It originates commercial, consumer and other loans and accepts deposits, provides electronic banking services, such as online and mobile banking, including remote deposit capture, delivers treasury and cash management services, and provides banking services to other financial institutions. The company offers a range of products and services which include telephone banking, direct deposit, Internet banking, mobile banking, boxes, and automatic account transfers.
Examining Servisfirst Bancshares Inc's Dividend History
Servisfirst Bancshares Inc has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Assessing Servisfirst Bancshares Inc's Dividend Yield and Growth
As of today, Servisfirst Bancshares Inc currently has a 12-month trailing dividend yield of 2.05% and a 12-month forward dividend yield of 2.14%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Servisfirst Bancshares Inc's annual dividend growth rate was 15.80%. Extended to a five-year horizon, this rate increased to 31.90% per year.
Based on Servisfirst Bancshares Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Servisfirst Bancshares Inc stock as of today is approximately 8.18%.
Evaluating the Sustainability of Servisfirst Bancshares Inc's Dividends
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Servisfirst Bancshares Inc's dividend payout ratio is 0.24.
Servisfirst Bancshares Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Servisfirst Bancshares Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Exploring Servisfirst Bancshares Inc's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Servisfirst Bancshares Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Servisfirst Bancshares Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Servisfirst Bancshares Inc's revenue has increased by approximately 16.70% per year on average, a rate that outperforms approximately 86.09% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Servisfirst Bancshares Inc's earnings increased by approximately 18.60% per year on average, a rate that outperforms approximately 73.03% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 19.70%, outperforms approximately 79.88% of global competitors.
Conclusion
With a consistent dividend payment record, robust growth metrics, and a healthy profitability rank, Servisfirst Bancshares Inc presents a compelling case for dividend investors. The company's strong revenue and earnings growth rate, coupled with a low payout ratio, suggest a sustainable dividend profile. However, investors should keep an eye on the company's future earnings and dividend growth to ensure the sustainability of dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
