Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has announced that it will pay a dividend of $0.18 per share on the 31st of March. This means the annual payment will be 2.6% of the current stock price, which is lower than the industry average.

Check out our latest analysis for Seacoast Banking Corporation of Florida

Seacoast Banking Corporation of Florida's Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Seacoast Banking Corporation of Florida is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Based on Seacoast Banking Corporation of Florida's last earnings report, calculating for its payout ratio equates to 50%, which means that the company covered its last dividend with comfortable room to spare.

Looking forward, EPS is forecast to rise by 61.3% over the next 3 years. Analysts forecast the future payout ratio could be 38% over the same time horizon, which is a number we think the company can maintain.

Seacoast Banking Corporation of Florida Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was $0.52, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 8.5% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

Dividend Growth Is Doubtful

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Over the past five years, it looks as though Seacoast Banking Corporation of Florida's EPS has declined at around 5.8% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

Our Thoughts On Seacoast Banking Corporation of Florida's Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Seacoast Banking Corporation of Florida has been making. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Given that earnings are not growing, the dividend does not look nearly so attractive. Very few businesses see earnings consistently shrink year after year in perpetuity though, and so it might be worth seeing what the 6 analysts we track are forecasting for the future. Is Seacoast Banking Corporation of Florida not quite the opportunity you were looking for? Why not check out our selection of top 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.