Is Capital City Bank Stock Worth Buying Post 4.4% Dividend Hike?

Capital City Bank Group, Inc. CCBG announced a quarterly cash dividend of 24 cents per share, indicating a 4.4% hike from the prior payout of 23 cents. The dividend will be paid out on March 24, 2025, to its shareholders of record as of March 10.

Before this, in August 2024, CCBG raised its dividend by 9.5% to 23 cents per share. The company has increased its dividend payout nine times in the past five years. Considering yesterday’s closing price of $37.10, its current dividend yield is 2.48% compared with the industry’s average of 2.26%.

Capital City Bank Group Dividend Yield (TTM)

This Florida-headquartered bank has a five-year annualized dividend growth rate of 11.35%, with a payout ratio of 29% of its earnings. This indicates that the stock retains adequate earnings for reinvestment and growth initiatives while still delivering lucrative returns to its shareholders.

Apart from regular quarterly dividend payouts, CCBG has a share buyback program in place. On Jan. 25, 2024, CCBG’s board of directors approved a new share repurchase program of 0.75 million shares for the next five years. In 2024, it repurchased 82,540 shares.
 

CCBG’s Strong Liquidity to Aid Capital Distribution

The company enjoys a strong liquidity position. As of Dec. 31, 2024, the bank had total cash and cash equivalents of $391.9 million, while its total debt (short-term and other long-term borrowings) comprised only $29 million. 

Further, it also has a strong capital position with a common equity Tier-1 ratio of 17.58% and a total capital ratio of 18.77% as of Dec. 31, 2024. 

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

CCBG's Estimates Show Bullish Sentiments

In the past month, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved upward.

Estimate Revision Trend

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Should Investors Consider Capital City Bank?

Capital City Bank has been witnessing steady organic growth over the past few years. CCBG’s total revenues witnessed a compound annual growth rate of 2.2% over the past four years ending in 2024. 

Also, its strong liquidity position will help the bank to sustain capital distribution moves.  

Therefore, given a recent increase in dividends and strong fundamentals, investors can consider buying CCBG stock. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

In the past six months, shares of CCBG have gained 9.7%, outperforming the industry’s growth of 3.7%.

Price Performance

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Other Banks That Announced Dividend Hikes

Last month, Hancock Whitney Corp. HWC hiked its quarterly cash dividend by 12.5% to 45 cents per share. The dividend will be paid out on March 17, 2025, to its shareholders of record as of March 5.

Before the recent hike, HWC increased its dividend by 33.3% to 40 cents per share in April 2024. Hancock Whitney has raised its dividend thrice in the past five years, with growth rate of 7.5%. It has a dividend payout ratio of 30%.

In January, Bank OZK OZK hiked its quarterly cash dividend by 2.4% to 42 cents per share. The dividend was paid out on Jan. 21, 2025, to its shareholders of record as of Jan. 14.

OZK has hiked its quarterly cash dividend in each of the last 58 quarters. Before the recent hike, the bank increased its dividend by 2.5% to 41 cents per share in October 2024.

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This article originally published on Zacks Investment Research (zacks.com).

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