Bank OZK's Dividend Analysis
Dissecting the Upcoming Dividend and Historical Performance of Bank OZK
Bank OZK (NASDAQ:OZK) recently announced a dividend of $0.38 per share, payable on 2024-01-23, with the ex-dividend date set for 2024-01-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Bank OZK's dividend performance and assess its sustainability.
What Does Bank OZK Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Bank OZK is a bank holding company that owns and operates a community bank, Bank of the Ozarks. The bank operates offices primarily in the southeastern United States, as well as Texas, New York, and California. The bank holding company also owns a number of finance subsidiary business trusts formed in connection with the issuance of debt and preferred securities. Bank of the Ozarks provides a wide range of retail and commercial banking services, but principally concentrates its activities on real estate loans, which account for the great majority of the bank's loans and leases. The bank's real estate lending arm, which finances many metropolitan construction and development projects, extends further than many of its community banking competitors.
A Glimpse at Bank OZK's Dividend History
Bank OZK has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Bank OZK has increased its dividend each year since 2001. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 23 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Bank OZK's Dividend Yield and Growth
As of today, Bank OZK currently has a 12-month trailing dividend yield of 2.91% and a 12-month forward dividend yield of 3.12%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Bank OZK's annual dividend growth rate was 10.30%. Extended to a five-year horizon, this rate increased to 12.30% per year. And over the past decade, Bank OZK's annual dividends per share growth rate stands at an impressive 16.20%.
Based on Bank OZK's dividend yield and five-year growth rate, the 5-year yield on cost of Bank OZK stock as of today is approximately 5.20%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Bank OZK's dividend payout ratio is 0.24.
Bank OZK's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Bank OZK's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Bank OZK's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Bank OZK's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bank OZK's revenue has increased by approximately 10.70% per year on average, a rate that outperforms approximately 70.51% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Bank OZK's earnings increased by approximately 10.70% per year on average, a rate that outperforms approximately 56.5% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.80%, which outperforms approximately 40.65% of global competitors.
Next Steps
Considering Bank OZK's consistent dividend payments, robust dividend growth rate, conservative payout ratio, fair profitability, and solid growth metrics, the company presents an appealing case for value investors focused on dividend income. The bank's strategic focus on real estate lending, combined with its geographic expansion, underpins its potential for continued growth and dividend sustainability. As investors ponder their next move, Bank OZK's upcoming dividend payment and financial health indicators offer much to consider. Will Bank OZK continue its dividend achiever streak, and how will its growth strategies impact future payouts? These are questions value investors may want to explore further.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
