It looks like Southern States Bancshares, Inc. (NASDAQ:SSBK) is about to go ex-dividend in the next 4 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Southern States Bancshares' shares before the 2nd of February in order to be eligible for the dividend, which will be paid on the 16th of February.
The company's next dividend payment will be US$0.09 per share, and in the last 12 months, the company paid a total of US$0.36 per share. Last year's total dividend payments show that Southern States Bancshares has a trailing yield of 1.3% on the current share price of $28.49. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! 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
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Southern States Bancshares paid out just 12% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Southern States Bancshares has grown its earnings rapidly, up 21% a year for the past five years.
Unfortunately Southern States Bancshares has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
To Sum It Up
Is Southern States Bancshares worth buying for its dividend? Companies like Southern States Bancshares that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Southern States Bancshares appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Southern States Bancshares for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with Southern States Bancshares and understanding them should be part of your investment process.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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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