USCB Financial Holdings, Inc.'s (NASDAQ:USCB) periodic dividend will be increasing on the 5th of March to $0.10, with investors receiving 100% more than last year's $0.05. Despite this raise, the dividend yield of 1.1% is only a modest boost to shareholder returns.

Check out our latest analysis for USCB Financial Holdings

USCB Financial Holdings' Payment Expected To Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive.

Given that this is the first year that USCB Financial Holdings is paying out a dividend, we are not yet able to make an analysis based on the company's dividend paying history. Based on USCB Financial Holdings' last earnings report however, the payout ratio is at a comfortable 14%, meaning that the company may be able to sustain this dividend for future years if it continues on this earnings trend.

Looking forward, EPS is forecast to rise by 66.0% over the next 3 years. The future payout ratio could be 12% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

USCB Financial Holdings Doesn't Have A Long Payment History

Without a track record of dividend payments, we can't make a judgement on how stable it has been. 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.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that USCB Financial Holdings has grown earnings per share at 110% per year over the past three years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

USCB Financial Holdings Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for USCB Financial Holdings for free with public analyst estimates for the company. Is USCB Financial Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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.