Bank OZK (OZK) Announces 2.7% Increase in Quarterly Dividend
Bank OZK OZK has again announced a hike in its quarterly dividend. The company declared a quarterly cash dividend of 38 cents per share, marking an increase of 2.7% from the prior quarter. The dividend will be paid out on Jan 23 to shareholders on record as of Jan 16.
This represents the 54th consecutive quarter of a dividend hike by OZK.
Prior to the recent hike, OZK raised its dividend by 2.8% to 37 cents per share in October 2023. Also, the company has a five-year annualized dividend growth of 10.6%. Currently, the company's payout ratio is 25% of earnings.
Considering yesterday’s closing price of $49.75, Bank OZK’s dividend yield is currently pegged at 3.06%, which is above the industry average of 2.68%.
Bank OZK’s track record of consistent dividend hikes has led to its inclusion in the S&P High Yield Dividend Aristocrats index since January 2018. The index includes the members of the S&P Composite 1500 that have maintained a managed-dividends policy of consistently increasing common stock dividends every year for at least 20 years, and that meet minimum float-adjusted market capitalization and liquidity requirements.
Apart from quarterly dividend hikes, Bank OZK had a share repurchase program in place. In November 2022, the company announced a new buyback program, under which it was authorized to repurchase up to $300 million worth of shares. During the first nine months of 2023, the bank repurchased 4.3 million shares for $151.5 million. The program expired on Nov 9, 2023.
Though the company hasn’t announced any new buyback plan, management expects to pursue a new program this year.
Bank OZK maintains a decent liquidity position. The company had a total debt of $1.9 billion and cash and cash equivalents of $1.86 billion as of Sep 30, 2023. Given a robust capital and liquidity position, as well as lower debt-equity and dividend payout ratios compared with peers, the company is expected to sustain its capital distribution activities. Through this, Bank OZK will keep enhancing shareholder value.
Over the past three months, shares of Bank OZK have jumped 39.4%, outperforming the industry’s rally of 29.5%
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Bank OZK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Taking Similar Steps
Fulton Financial Corporation FULT announced a sequential dividend hike. The company declared a quarterly cash dividend of 17 cents per share, reflecting a rise of 6.3% from the prior payout. The dividend will be paid out on Jan 12, 2024, to shareholders of record as of Jan 2.
Prior to the current hike, the company increased its dividend by 6.7% to 16 cents per share in June 2023. FULT raised its quarterly dividend eight times in the last five years. Further, it has a five-year annualized dividend growth of 5.4%. Currently, the company's payout ratio is 36% of earnings.
ServisFirst Bancshares, Inc.’s SFBS board of directors has approved an increase in quarterly dividend to 30 cents per share, marking a 7.1% hike from the prior payout. The increased amount will be paid out on Jan 8, 2024, to shareholders on record as of Jan 2.
SFBS has hiked its dividend every year since 2014. Before the latest hike, it increased its dividend by 21.7% to 28 cents per share in December 2022.
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