Important news for shareholders and potential investors in First Guaranty Bancshares Inc (NASDAQ:FGBI): The dividend payment of $0.16 per share will be distributed into shareholder on 29 December 2017, and the stock will begin trading ex-dividend at an earlier date, 18 December 2017. Is this future income a persuasive enough catalyst for investors to think about First Guaranty Bancshares as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for First Guaranty Bancshares
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Is it paying an annual yield above 75% of dividend payers?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has the amount of dividend per share grown over the past?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does First Guaranty Bancshares fit our criteria?
The company currently pays out 39.85% of its earnings as a dividend, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider First Guaranty Bancshares as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, First Guaranty Bancshares has a yield of 2.00%, which is on the low-side for banks stocks.
What this means for you:
Are you a shareholder? You may be wondering why First Guaranty Bancshares is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be valuable exploring other dividend stocks as alternatives to First Guaranty Bancshares or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.