Bank OZK (NASDAQ:OZK) Is Increasing Its Dividend To $0.36
The board of Bank OZK (NASDAQ:OZK) has announced that it will be paying its dividend of $0.36 on the 21st of July, an increased payment from last year's comparable dividend. This takes the annual payment to 3.5% of the current stock price, which is about average for the industry.
See our latest analysis for Bank OZK
Bank OZK's Payment Expected To Have Solid Earnings Coverage
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Bank OZK has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 26%, which means that Bank OZK would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 7.3%. Analysts estimate the future payout ratio will be 27% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Bank OZK Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from $0.28 total annually to $1.40. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
We Could See Bank OZK's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Bank OZK has been growing its earnings per share at 7.8% a year over the past five years. Bank OZK definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Bank OZK's Dividend
Overall, a dividend increase is always good, and we think that Bank OZK is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 Bank OZK analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
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