United Security Bancshares (NASDAQ:UBFO) Has Affirmed Its Dividend Of $0.12
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United Security Bancshares' (NASDAQ:UBFO) investors are due to receive a payment of $0.12 per share on 22nd of April. The dividend yield will be 5.3% based on this payment which is still above the industry average.
United Security Bancshares' Dividend Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having paid out dividends for 8 years, United Security Bancshares has a good history of paying out a part of its earnings to shareholders. Based on United Security Bancshares' last earnings report, the payout ratio is at a decent 56%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, EPS could fall by 0.9% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we believe the future payout ratio could be 62%, which we are pretty comfortable with and we think is feasible on an earnings basis.
Check out our latest analysis for United Security Bancshares
United Security Bancshares Doesn't Have A Long Payment History
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 8 years was $0.20 in 2017, and the most recent fiscal year payment was $0.48. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
Dividend Growth May Be Hard To Achieve
The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. Although it's important to note that United Security Bancshares' earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time.
Our Thoughts On United Security Bancshares' Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While United Security Bancshares is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would probably look elsewhere for an income investment.