Colony Bankcorp (NASDAQ:CBAN) Is Due To Pay A Dividend Of $0.11

Colony Bankcorp, Inc. (NASDAQ:CBAN) has announced that it will pay a dividend of $0.11 per share on the 22nd of November. Based on this payment, the dividend yield will be 4.6%, which is fairly typical for the industry.

Check out our latest analysis for Colony Bankcorp

Colony Bankcorp's Earnings Will Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time.

Having paid out dividends for 7 years, Colony Bankcorp has a good history of paying out a part of its earnings to shareholders. Based on Colony Bankcorp's last earnings report, the payout ratio is at a decent 35%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, EPS is forecast to rise by 30.2% over the next 3 years. Analysts forecast the future payout ratio could be 30% over the same time horizon, which is a number we think the company can maintain.

Colony Bankcorp Doesn't Have A Long Payment History

Colony Bankcorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2016, the dividend has gone from $0.10 total annually to $0.44. This implies that the company grew its distributions at a yearly rate of about 24% over that duration. 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. Colony Bankcorp hasn't seen much change in its earnings per share over the last five years. If Colony Bankcorp is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Our Thoughts On Colony Bankcorp's Dividend

Overall, we think Colony Bankcorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Colony Bankcorp that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.