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Capital City Bank (CCBG) Could Be a Great Choice

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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Tallahassee, Capital City Bank (CCBG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 17.22%. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 2.23%. In comparison, the Banks - Southeast industry's yield is 2.34%, while the S&P 500's yield is 1.49%.

Looking at dividend growth, the company's current annualized dividend of $0.96 is up 9.1% 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 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for CCBG for this fiscal year. The Zacks Consensus Estimate for 2025 is $3.43 per share, representing a year-over-year earnings growth rate of 9.94%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. 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 #1 (Strong Buy).


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