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Bank OZK (OZK) is a Top Dividend Stock Right Now: Should You Buy?
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank OZK in Focus
Headquartered in Little Rock, Bank OZK (OZK - Free Report) is a Finance stock that has seen a price change of -12.9% so far this year. The bank is currently shelling out a dividend of $0.32 per share, with a dividend yield of 3.16%. This compares to the Banks - Northeast industry's yield of 2.36% and the S&P 500's yield of 1.69%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.28 is up 13% from last year. In the past five-year period, Bank OZK has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.39%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank OZK's payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for OZK for this fiscal year. The Zacks Consensus Estimate for 2022 is $4.49 per share, with earnings expected to increase 0.45% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that OZK is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Bank OZK (OZK) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank OZK in Focus
Headquartered in Little Rock, Bank OZK (OZK - Free Report) is a Finance stock that has seen a price change of -12.9% so far this year. The bank is currently shelling out a dividend of $0.32 per share, with a dividend yield of 3.16%. This compares to the Banks - Northeast industry's yield of 2.36% and the S&P 500's yield of 1.69%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.28 is up 13% from last year. In the past five-year period, Bank OZK has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.39%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank OZK's payout ratio is 29%, which means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for OZK for this fiscal year. The Zacks Consensus Estimate for 2022 is $4.49 per share, with earnings expected to increase 0.45% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that OZK is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).