Yahoo Finance Colony Bankcorp (NASDAQ:CBAN) Is Due To Pay A Dividend Of $0.1125
The board of Colony Bankcorp, Inc. (NASDAQ:CBAN) has announced that it will pay a dividend of $0.1125 per share on the 22nd of May. This makes the dividend yield 4.2%, which will augment investor returns quite nicely.
View our latest analysis for Colony Bankcorp
Colony Bankcorp's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having paid out dividends for 7 years, Colony Bankcorp has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Colony Bankcorp's payout ratio of 35% is a good sign for current shareholders as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to rise by 13.6% over the next year. If the dividend continues on this path, the future payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.
Colony Bankcorp Doesn't Have A Long Payment History
Colony Bankcorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2017, the dividend has gone from $0.10 total annually to $0.45. This means that it has been growing its distributions at 24% per annum over that time. Colony Bankcorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. Unfortunately things aren't as good as they seem. Although it's important to note that Colony Bankcorp's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time.
Our Thoughts On Colony Bankcorp's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. This company is not in the top tier of income providing stocks.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Colony Bankcorp that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
