Bank OZK (NASDAQ:OZK) Is Increasing Its Dividend To $0.40

Bank OZK (NASDAQ:OZK) has announced that it will be increasing its dividend from last year's comparable payment on the 19th of July to $0.40. This makes the dividend yield about the same as the industry average at 3.7%.

Check out our latest analysis for Bank OZK

Bank OZK's Earnings Will Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Bank OZK has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Bank OZK's payout ratio sits at 24%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, EPS is forecast to rise by 34.9% over the next 3 years. The future payout ratio could be 26% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Bank OZK Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.42 in 2014 to the most recent total annual payment of $1.52. This means that it has been growing its distributions at 14% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Bank OZK has impressed us by growing EPS at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Bank OZK's prospects of growing its dividend payments in the future.

Bank OZK Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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 of these factors considered, we think this has solid potential as a dividend 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. Taking the debate a bit further, we've identified 1 warning sign for Bank OZK that investors need to be conscious of moving forward. Is Bank OZK not quite the opportunity you were looking for? Why not check out our selection of top 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.

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