Capital City Bank Group, Inc. (NASDAQ: CCBG) announced that it will pay a dividend of US $ 0.15 per share on June 21. This means that the annual payout will be 2.2% of the current share price, which is the industry average.
Check out our latest analysis for Capital City Bank Group
Capital City Bank Group Profits Easily Cover Distributions
While it’s always good to see a solid dividend yield, we also need to consider whether the payout is feasible. However, Capital City Bank Group profits easily cover the dividend. This means that most of its profits are kept to grow the business.
Looking ahead, earnings per share are expected to decline 11.8% over the next year. If the dividend continues according to recent trends, we estimate the payout ratio could be 40%, which we consider to be quite comfortable, with most of the company’s earnings remaining to grow the business in the future.
The company has a long history of dividends, but it doesn’t look good with the cuts of the past. The first annual payment in the past 10 years was $ 0.40 in 2011, and the most recent year’s payment was $ 0.60. This means that the company has increased its distributions at an annual rate of approximately 4.1% during this time. It’s encouraging to see some dividend growth, but the dividend has been reduced at least once, and the size of the reduction would eliminate most of the growth anyway, making it less attractive as income from the dividend. ‘investment.
The dividend is expected to increase
Growth in earnings per share could be a mitigating factor considering past dividend fluctuations. Capital City Bank Group has seen EPS increase over the past five years, at 31% per year. Rapid earnings growth and a low payout rate suggest that this company is effectively reinvesting in its business. If this continues, this business could have a bright future.
Capital City Bank Group Looks Like a Super Dividend Stock
In summary, it’s good to see that the dividend remains constant, and we don’t think there is any reason to suspect that this could change in the medium term. Distributions are easily covered by profits, and there is also a lot of cash generated. If earnings go down over the next 12 months, the dividend could be shaken up a bit, but we don’t think that should cause too much of a problem in the long run. Overall, this checks many of the boxes we look for when choosing an income stock.
Investors generally tend to favor companies with a consistent and stable dividend policy over those that operate irregularly. However, there are other things for investors to consider when analyzing the performance of stocks. Concrete example: we have spotted 2 warning signs for Capital City Bank Group (1 of which is potentially serious!) that you should know. If you are a dividend investor, you can also view our curated list of high performing dividend stocks.
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