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 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.

Capital City Bank in Focus

Based in Tallahassee, Capital City Bank (CCBG) is in the Finance sector, and so far this year, shares have seen a price change of -0.57%. Currently paying a dividend of $0.23 per share, the company has a dividend yield of 2.52%. In comparison, the Banks - Southeast industry's yield is 2.26%, while the S&P 500's yield is 1.54%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.92 is up 4.5% 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 11.35%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Capital City Bank's current payout ratio is 29%, meaning 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, representing a year-over-year earnings growth rate of 0.64%.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious 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).

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