Colony Bankcorp's (NASDAQ:CBAN) Dividend Will Be $0.1125

Colony Bankcorp, Inc. (NASDAQ:CBAN) will pay a dividend of $0.1125 on the 20th of November. Based on this payment, the dividend yield will be 3.0%, which is fairly typical for the industry.

See our latest analysis for Colony Bankcorp

Colony Bankcorp's Dividend Forecasted To Be Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Colony Bankcorp has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 36%shows that Colony Bankcorp would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to expand by 48.5%. Analysts forecast the future payout ratio could be 27% 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 $0.45. This works out to be a compound annual growth rate (CAGR) of approximately 21% a year over that time. Colony Bankcorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

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. While EPS growth is quite low, Colony Bankcorp has the option to increase the payout ratio to return more cash to shareholders.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. 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. For instance, we've picked out 1 warning sign for Colony Bankcorp that investors should take into consideration. Is Colony Bankcorp not quite the opportunity you were looking for? Why not check out our selection of top 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.