Capital City Bank Group (NASDAQ:CCBG) Is Paying Out A Larger Dividend Than Last Year

Capital City Bank Group, Inc.'s (NASDAQ:CCBG) dividend will be increasing from last year's payment of the same period to $0.23 on 23rd of September. Despite this raise, the dividend yield of 2.4% is only a modest boost to shareholder returns.

See our latest analysis for Capital City Bank Group

Capital City Bank Group's Dividend Forecasted To Be Well Covered By Earnings

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

Capital City Bank Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Capital City Bank Group's payout ratio of 27% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 1.9% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 35%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Capital City Bank Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.08, compared to the most recent full-year payment of $0.84. This implies that the company grew its distributions at a yearly rate of about 27% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Capital City Bank Group has seen EPS rising for the last five years, at 13% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Capital City Bank Group Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Capital City Bank Group has 2 warning signs (and 1 which doesn't sit too well with us) 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.