Stock Analysis

Capital Bancorp (NASDAQ:CBNK) Is Due To Pay A Dividend Of $0.06

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NasdaqGS:CBNK
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Capital Bancorp, Inc. (NASDAQ:CBNK) has announced that it will pay a dividend of $0.06 per share on the 23rd of November. Including this payment, the dividend yield on the stock will be 1.0%, which is a modest boost for shareholders' returns.

Check out the opportunities and risks within the US Banks industry.

Capital Bancorp's Payment Expected To Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive.

Currently, Capital Bancorp does not yet have a history of paying dividends out, with this being its first year doing so. Despite Capital Bancorp only paying out for the first time, calculating for the company's payout ratio shows a percentage of 1.6%, a great sign for the sustainability of the company's dividend for the future.

The next 3 years are set to see EPS grow by 4.5%. Analysts estimate the future payout ratio will be 7.2% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

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NasdaqGS:CBNK Historic Dividend October 30th 2022

Capital Bancorp Doesn't Have A Long Payment History

Without a track record of dividend payments, we can't make a judgement on how stable it has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Capital Bancorp has impressed us by growing EPS at 37% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Capital Bancorp's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Capital Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

What are the risks and opportunities for Capital Bancorp?

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A.

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Rewards

  • Trading at 73.3% below our estimate of its fair value

  • Earnings have grown 35.4% per year over the past 5 years

Risks

No risks detected for CBNK from our risks checks.

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