Bank OZK's (NASDAQ:OZK) Shareholders Will Receive A Bigger Dividend Than Last Year

Bank OZK (NASDAQ:OZK) has announced that it will be increasing its dividend from last year's comparable payment on the 24th of January to $0.34. This takes the annual payment to 3.4% of the current stock price, which is about average for the industry.

See our latest analysis for Bank OZK

Bank OZK's Earnings Will Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time.

Bank OZK has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 28%, which means that Bank OZK would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 28.6% over the next 3 years. Analysts forecast the future payout ratio could be 28% over the same time horizon, which is a number we think the company can maintain.

Bank OZK Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.24, compared to the most recent full-year payment of $1.36. This works out to be a compound annual growth rate (CAGR) of approximately 19% a year over that time. 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 who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Bank OZK has been growing its earnings per share at 9.2% a 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.

We Really Like Bank OZK's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 8 analysts we track are forecasting for Bank OZK for free with public analyst estimates for the company. 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.