Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Seacoast Banking Corporation of Florida's shares before the 14th of March in order to receive the dividend, which the company will pay on the 31st of March.

The company's upcoming dividend is US$0.18 a share, following on from the last 12 months, when the company distributed a total of US$0.72 per share to shareholders. Based on the last year's worth of payments, Seacoast Banking Corporation of Florida stock has a trailing yield of around 2.7% on the current share price of US$26.28. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Seacoast Banking Corporation of Florida has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Seacoast Banking Corporation of Florida

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Seacoast Banking Corporation of Florida paid out more than half (50%) of its earnings last year, which is a regular payout ratio for most companies.

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?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Seacoast Banking Corporation of Florida's earnings per share have fallen at approximately 5.8% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, four years ago, Seacoast Banking Corporation of Florida has lifted its dividend by approximately 8.5% a year on average. That's interesting, but the combination of a growing dividend despite declining earnings can typically only be achieved by paying out more of the company's profits. This can be valuable for shareholders, but it can't go on forever.

The Bottom Line

From a dividend perspective, should investors buy or avoid Seacoast Banking Corporation of Florida? We're not overly enthused to see Seacoast Banking Corporation of Florida's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. Seacoast Banking Corporation of Florida doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.

Wondering what the future holds for Seacoast Banking Corporation of Florida? See what the five analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.