Southwest Georgia Financial Corp. : SGB-US: Dividend Analysis : September 05th, 2017 (record date) : By the numbers : September 25, 2017

Our analysis is based on comparing Southwest Georgia Financial Corp. with the following peers – Fidelity Southern Corporation, Ameris Bancorp, Colony Bankcorp, Inc., United Community Banks, Inc., Associated Banc-Corp, Renasant Corporation, Hancock Holding Company, Cullen/Frost Bankers, Inc. and State Bank Financial Corporation (LION-US, ABCB-US, CBAN-US, UCBI-US, ASB-US, RNST-US, HBHC-US, CFR-US and STBZ-US).

Southwest Georgia Financial Corp.’s dividend yield is 2.18 percent and its dividend payout is 27.33 percent. This compares to a peer median dividend yield of 2.04 percent and a payout level of 29.95 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking for good current dividend income within this peer group. On the contrary, the company’s average dividend quality score of 58 out of a possible score of 100, lessens its attractiveness for dividend investors.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to June 30, 2017), SGB-US paid a medium quality dividend, which represents a yield of 2.18% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were medium quality and 3 were low quality.
  • The ending cash balance, with a dividend coverage of 7.14x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2017), SGB-US paid a medium quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 5.13x), investing cash flow (coverage of -42.53x), issuance cash flow (coverage of 40.69x) and twelve-month prior cash (coverage of 5.21x), for a total dividend coverage of 8.14x.

SGB-US’s issuance cash flow includes outflows from net debt repayment (coverage of -1.42x) and net share buybacks (coverage of -0.01x). Thus, the total coverage including share buybacks is 8.15x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 1.64 1.73 2.23 2.51 2.1 2.18
Dividend Payout (%) 21.05 18.35 28.07 30.3 26.58 27.33

A complete list of metrics and analysis is available on the company page.

Company Profile

Southwest Georgia Financial Corp. is a bank holding company, which provides banking services to individuals and businesses through the Southwest Georgia Bank. It offers consumer and commercial checking accounts, NOW accounts, savings accounts, certificates of deposit, lines of credit, VISA business accounts, money transfers, and mortgage banking services. It operates through the following segments: Retail and Commercial Banking Services, Insurance Services, Wealth Strategies Services, and Financial Management Services. The Retail and Commercial Banking Services segment serves consumer and commercial customers by offering a variety of loan and deposit products, and other traditional banking services. The Insurance Services segment offers full spectrum of commercial and personal lines insurance products including life, health, property, and casualty insurance. The Wealth Strategies Services segment provides personal trust administration, estate settlement, investment management, employee retirement benefit services, Individual Retirement Account administration, and retail brokerage services. The Financial Management Services segment manages investment securities portfolio. The company was founded in 1980 and is headquartered in Moultrie, GA.


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