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Capital City Bank (CCBG) Ups Dividend by 7.1%: Worth a Look?

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Similar to the last several years, Capital City Bank Group, Inc. (CCBG - Free Report) has announced a hike in dividend. The company announced a quarterly cash dividend of 15 cents per share, representing a 7.1% increase from the prior payout. The amount will be paid out on Dec 21 to shareholders of record as on Dec 7.

Considering last day’s closing price of $23.03, Capital City Bank’s dividend yield currently stands at 2.61%. The yield is moderately impressive when compared with the industry average of 2.38%. Also, this yield is not only attractive for income investors but it represents a steady income stream.

Capital City Bank’s solid business model highlights its commitment toward enhancing shareholders’ value with its strong cash generation capabilities. Prior to the latest revision, the company had raised its quarterly dividend to 14 cents per share in February this year, marking a 7.7% hike.

Additionally, Capital City Bank has a share repurchase plan in place. In January 2019, the bank had announced authorization to buy back 750,000 shares through February 2024. As of Sep 30, 2020, nearly 573,000 shares remained to be repurchased.
 
While Capital City Bank stock looks promising based on regular rise in dividend and share buybacks, one must take a look at its fundamentals and financial performance before taking any investment decision.

Capital City Bank has a solid liquidity position. As of Sep 30, 2020, it had total debt of $149.1 million, while its cash and cash equivalents were $702.6 million. Also, its total debt to total capital of 14.6% and times-interest-earned of 18.4 in the third quarter of 2020 improved sequentially. Thus, robust liquidity position and decent earnings strength are likely to help company sustain capital deployment activities.

Moreover, Capital City Bank has solid prospects. The company has been growing organically and its revenues are expected to get support from strength in fee income sources, and strong loan and deposit balances amid lower rates and economic slowdown.  

The Zacks Consensus Estimate for earnings has been revised 16.8% and 41% upward for 2020 and 2021, respectively, over the past 30 days. At present, Capital City Bank sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Capital City Bank have rallied 24.2% over the past six months, underperforming the industry’s 40.7% gain.

 

Other Banks Taking Similar Actions

Over the past months, several other banks have raised their dividends to enhance shareholder value. Some of these are Bank OZK (OZK - Free Report) , Glacier Bancorp, Inc. (GBCI - Free Report) and First Financial Corporation (THFF - Free Report) . Bank OZK raised its quarterly dividend nearly 1%, while Glacier Bancorp increased it 3.4%. Further, First Financial announced a 1.9% hike in its semi-annual dividend.

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