Colony Bankcorp (NASDAQ:CBAN) Is Due To Pay A Dividend Of $0.11
Colony Bankcorp, Inc. (NASDAQ:CBAN) will pay a dividend of $0.11 on the 22nd of November. This means the dividend yield will be fairly typical at 4.6%.
See our latest analysis for Colony Bankcorp
Colony Bankcorp's Payment Expected To Have Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Colony Bankcorp has a good history of paying out dividends, with its current track record at 7 years. Taking data from its last earnings report, calculating for the company's payout ratio of 35%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 30.2%. Analysts forecast the future payout ratio could be 30% over the same time horizon, which is a number we think the company can maintain.
Colony Bankcorp Doesn't Have A Long Payment History
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 7 years was $0.10 in 2016, and the most recent fiscal year payment was $0.44. This means that it has been growing its distributions at 24% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
Colony Bankcorp May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Although it's important to note that Colony Bankcorp's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. While growth may be thin on the ground, Colony Bankcorp could always pay out a higher proportion of earnings to increase shareholder returns.
In Summary
Overall, we think Colony Bankcorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Colony Bankcorp that investors need to be conscious of moving forward. 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.
