All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Capital City Bank in Focus
Headquartered in Tallahassee, Capital City Bank (CCBG) is a Finance stock that has seen a price change of 22.54% so far this year. The bank holding company is currently shelling out a dividend of $0.17 per share, with a dividend yield of 2.1%. This compares to the Banks - Southeast industry's yield of 2.22% and the S&P 500's yield of 1.68%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.68 is up 9.7% from last year. Over the last 5 years, Capital City Bank has increased its dividend 5 times on a year-over-year basis for an average annual increase of 22.25%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Capital City Bank's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
CCBG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.42 per share, with earnings expected to increase 22.22% from the year ago period.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CCBG is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Capital City Bank Group (CCBG) : Free Stock Analysis Report
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