Wednesday, May 21, 2014

New Purchase - SBSI

20 shares SBSI, 3.28% yield, $16.80 annual income

The plan for May was to do four weekly purchases, plus one extra purchase in order to use up free trades before they expire.  As you can see I chose Southside Bancshares for the planned extra purchase.  SBSI was actually the first purchase I made after starting this silly little blog back in January 2012.  That's roughly two and a half years ago!  Well, I've been very pleased with this company to say the least.  SBSI offers a nice yield, dividend growth, special dividends, and even yearly stock splits.  It has been a truly exceptional dividend growth stock.

The big news right now is that SBSI is in the process of acquiring a smaller Texas bank.  I honestly don't know enough about the banking industry to say it's a steal, but I did read some positive articles about it and checked out some presentations as well.  I more or less have to trust Southside's management here, and that's fine.  They are the experts.  I'm not.  Anyways the OmniAmerican M&A is supposed to bring growth and cost savings which might translate into higher dividend checks down the road.

SBSI now has a 1.34% weight (by income) for me.  I wouldn't mind grabbing even more shares here since it's weighted so low and is trading about 15% below my calculated fair value.

Symbol: SBSI
Core Position: No
Speculative Position: 
No
Expectations: 
Steady income; 7% (average) annual dividend growth
Automatic Sell: Dividend cut, frozen dividend
Consider Selling:  
Business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations

7 comments:

  1. yeah they are a solid little stock, I was looking at them today but ultimately went with TD instead because I wanted a local Canadian bank. SBSI has attractive growth and its worth a solid consideration.

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  2. Great pickup! I am also interested in adding additional shares (even though I just did). I am lower thank I would like to be in the financial industry, but I am still feeling a bit leery of banks in general.

    Take care!

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  3. CI,

    SBSI has been on my radar lately as well due to the recent pullback on the acquisition news. If they stay here at this level they're going to be very high on my list for a potential June purchase. Due to some changes in my personal life I'm holding capital a bit tight right now, but I really wish I could join you here in adding to this bank. Like you, my position in SBSI is rather small, so there's room to add. Nice move!

    Best wishes.

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  4. Hey! thanks for sharing. I've never heard about this stock before but now I am adding it to my watch list.

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  5. Thank you for this nice post.
    I like this kind of post ,
    Because it gives me clear and beautiful ideas about this topic.
    I hope your prosperity.

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  6. I have also been interested in SBSI for a while. It still seems like a fair price at 25.99/share. I am hoping the price stays low before my next pay week. This might be my next holding unless I find a better value elsewhere in the market. Thanks
    Dividend Mongrel
    http://dividendmongrel.blogspot.com/

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  7. Thank you for sharing this information this is very nice blog thank you for giving this info
    Groobers



    ReplyDelete