Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Capital City Bank (CCBG) is headquartered in Tallahassee, and is in the Finance sector. The stock has seen a price change of 9.98% since the start of the year. The bank holding company is currently shelling out a dividend of $0.27 per share, with a dividend yield of 2.31%. This compares to the Banks - Southeast industry's yield of 2.02% and the S&P 500's yield of 1.41%.
Looking at dividend growth, the company's current annualized dividend of $1.08 is up 8% 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 12.29%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Capital City Bank's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.
CCBG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $3.69 per share, which represents a year-over-year growth rate of 2.50%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CCBG presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Capital City Bank Group (CCBG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).