Capital City Bank Group, Inc. (CCBG Quick QuoteCCBG - Free Report) announced a quarterly cash dividend of 23 cents per share. This reflects a 9.5% hike from the prior payout of 21 cents per share. The dividend will be paid out on Sept. 23, 2024, to shareholders of record as of Sept. 9.

Before this, in February 2024, CCBG hiked its dividend by 5% to 21 cents. It has increased its dividend payout nine times in the past five years. Considering yesterday’s closing price of $34.33, CCBG’s dividend yield currently stands at 2.7% compared with the industry’s average of 2.47%.
 

This Florida-headquartered bank has a five-year annualized dividend growth rate of 10.49%. with a payout ratio of 28% of its earnings. This indicates that it retains adequate earnings for reinvestment and future growth initiatives while still delivering lucrative returns to its shareholders.

Similarly, other finance stocks like Northrim BanCorp, Inc. (NRIM Quick QuoteNRIM - Free Report) and Stock Yards Bancorp, Inc. (SYBT Quick QuoteSYBT - Free Report) are also providing investors with solid dividend options. In August, both NRIM and SYBT hiked their dividends by 1.6% and 3.3%, respectively, from their prior payout of 61 cents and 30 cents, respectively. 

Apart from regular quarterly dividend payouts, CCBG has a share buyback program in place. On Jan. 25, 2024, the board of directors approved a new share repurchase program of 0.75 million shares for the next five years. As of June 30, 2024, 0.59 million shares remain available under the authorization.

Capital City Bank’s Strong Liquidity to Aid Capital Distribution

The company enjoys a strong liquidity position. As of June 30, 2024, it had total cash and cash equivalents of $348 million, while its total debt (short-term and other long-term borrowings) comprised only $26 million. 

Further, it also has a strong capital position with a common equity Tier-1 ratio of 14.44% and a total capital ratio of 17.50% as of June 30, 2024. 

Capital City Bank’s strong liquidity and solid balance sheet position are likely to help sustain its capital distributions in the long run.

Capital City Bank Estimates Show Mixed Sentiments

In the past month, the Zacks Consensus Estimate for 2024 earnings has moved downward, while 2025 earnings have moved upward.

Should Investors Consider Capital City Bank?

Though Capital City Bank rewards its shareholders handsomely, prospective investors should analyze its fundamentals well before adding this stock to their portfolio.

The company has been witnessing steady organic growth over the past few years. CCBG’s total revenues witnessed a compound annual growth rate (CAGR) of 2.8% over the past three years ending 2023. This uptrend persisted in the first six months of 2024.

Further, its net interest income witnessed a CAGR of 16.2% in the same period and the uptick continued in the first half of 2024.
 
However, Capital City Bank's escalating expenses are a major concern. Its non-interest expenses witnessed a CAGR of 51.5% over the last three years, with the uptrend continuing in the first half of 2024.

Therefore, despite the recent increase in dividends, investors should not rush to buy the stock; rather, they should keep a close eye on this Zacks Rank #3 (Hold) stock before making a well-informed investment decision. You can see You can see the complete list of today's Zacks #1(Strong Buy) Rank stocks here.

In the past three months, shares of CCBG have gained 26.4%, outperforming the industry’s growth of 17.9%.

Image Source: Zacks Investment Research