Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 in Focus

Capital City Bank (CCBG) is headquartered in Tallahassee, and is in the Finance sector. The stock has seen a price change of -6.41% since the start of the year. The bank holding company is paying out a dividend of $0.24 per share at the moment, with a dividend yield of 2.8% compared to the Banks - Southeast industry's yield of 2.59% and the S&P 500's yield of 1.69%.

Taking a look at the company's dividend growth, its 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%. 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. Right now, Capital City Bank's payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, CCBG expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.14 per share, with earnings expected to increase 0.64% from the year ago period.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer 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. That said, they can take comfort from the fact that CCBG is not only an attractive dividend play, but is also a compelling investment opportunity with a 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).

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