The board of Capital City Bank Group, Inc. (NASDAQ:CCBG) has announced that it will be paying its dividend of $0.24 on the 24th of March, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 2.5%.

View our latest analysis for Capital City Bank Group

Capital City Bank Group's Payment Expected To Have Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Having distributed dividends for at least 10 years, Capital City Bank Group has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Capital City Bank Group's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 3.7% over the next 3 years. The future payout ratio could be 30% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Capital City Bank Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $0.08 total annually to $0.92. This implies that the company grew its distributions at a yearly rate of about 28% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Capital City Bank Group has been growing its earnings per share at 11% a year over the past five years. Capital City Bank Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Capital City Bank Group's Dividend

Overall, a dividend increase is always good, and we think that Capital City Bank Group is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Capital City Bank Group for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.