Southside Bancshares Inc. (SBSI) Dividend Stock Analysis

Linked here is a detailed quantitative analysis of Southside Bancshares Inc. (SBSI). Below are some highlights from the above linked analysis: Company Description: Southside Bancshares Inc. primarily provides financial services to individuals, businesses, municipal entities, and non-profit organizations. Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number SBSI is trading at a discount to all four valuations above. The stock is trading at a 34.6% discount to its calculated fair value of $31.01. SBSI earned a Star in this section since it is trading at a fair value. Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% SBSI earned two Stars in this section for 1.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. SBSI earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1969 and has increased its dividend payments for 12 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA SBSI earned a Star in this section for its NPV MMA Diff. of the $32,940. This amount is in excess of the $2,300 target I look for in a stock that has increased dividends as long as SBSI has.12... Read more

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