Seacoast Banking Corporation of Florida's (NASDAQ:SBCF) investors are due to receive a payment of $0.18 per share on 30th of September. This means the dividend yield will be fairly typical at 2.8%.

See our latest analysis for Seacoast Banking Corporation of Florida

Seacoast Banking Corporation of Florida's Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having paid out dividends for only 3 years, Seacoast Banking Corporation of Florida does not have much of a history being a dividend paying company. Based on Seacoast Banking Corporation of Florida's last earnings report, calculating for its payout ratio equates to 52%, which means that the company covered its last dividend with comfortable room to spare.

Looking forward, earnings per share is forecast to rise by 10.5% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 47% by next year, which is in a pretty sustainable range.

Seacoast Banking Corporation of Florida Doesn't Have A Long Payment History

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The dividend has gone from an annual total of $0.52 in 2021 to the most recent total annual payment of $0.72. This means that it has been growing its distributions at 11% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. Over the past five years, it looks as though Seacoast Banking Corporation of Florida's EPS has declined at around 2.3% a year. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.

In Summary

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. While Seacoast Banking Corporation of Florida is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We don't think Seacoast Banking Corporation of Florida is a great stock to add to your portfolio if income is your focus.