Capital City Bank Group (NASDAQ:CCBG) Has Announced That It Will Be Increasing Its Dividend To $0.20

The board of Capital City Bank Group, Inc. (NASDAQ:CCBG) has announced that it will be paying its dividend of $0.20 on the 25th of September, an increased payment from last year's comparable dividend. This takes the annual payment to 2.4% of the current stock price, which unfortunately is below what the industry is paying.

View our latest analysis for Capital City Bank Group

Capital City Bank Group's Payment Expected To Have Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end.

Having paid out dividends for 9 years, Capital City Bank Group has a good history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Capital City Bank Group's payout ratio sits at 23%, an extremely comfortable number that shows that it can pay its dividend.

Over the next year, EPS is forecast to fall by 0.2%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 29%, which would be comfortable for the company to continue in the future.

Capital City Bank Group Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2014, the dividend has gone from $0.08 total annually to $0.72. This means that it has been growing its distributions at 28% per annum over that time. Capital City Bank Group 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.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Capital City Bank Group has been growing its earnings per share at 26% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Capital City Bank Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Capital City Bank Group is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Capital City Bank Group has 2 warning signs (and 1 which is potentially serious) we think you should know about. Is Capital City Bank Group 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.