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

Bank OZK (NASDAQ:OZK) will increase its dividend from last year's comparable payment on the 21st of July to $0.36. The payment will take the dividend yield to 3.5%, which is in line with the average for the industry.

View 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 a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Bank OZK's last earnings report, the payout ratio is at a decent 26%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 7.3%. Analysts forecast the future payout ratio could be 27% over the same time horizon, which is a number we think the company can maintain.

Bank OZK Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.28, compared to the most recent full-year payment of $1.40. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

We Could See Bank OZK's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Bank OZK has been growing its earnings per share at 7.8% a year over the past five years. Bank OZK definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Bank OZK Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Bank OZK is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. 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.