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Bull of the Day: Bank OZK (OZK)

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The Zacks Finance Sector has displayed a marginal amount of relative strength in 2022, down roughly 18% vs. the S&P 500’s 21% decline.

Zacks Investment Research
Image Source: Zacks Investment Research

A highly-ranked stock residing in the sector, Bank OZK (OZK - Free Report) , offers financial products and services, including savings accounts, personal and business loans, debit and credit cards, mortgages, cash management, online banking services, and many others.

The company’s earnings outlook has turned visibly bright over the last several months, pushing the stock into a favorable Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

For investors seeking a strong stock currently displaying favorable characteristics, let’s take a deeper dive into the company.

Share Performance

Over the last three months, Bank OZK shares have been notably strong, increasing by nearly 6% in value and widely outperforming its sector.

Zacks Investment Research
Image Source: Zacks Investment Research

And over the last month, OZK shares have continued to display relative strength, declining 5% vs. its sector’s 7% decline.

Zacks Investment Research
Image Source: Zacks Investment Research

The favorable price action of OZK shares indicates that market participants have defended the stock at a much higher level than most, undoubtedly a positive in the historically-volatile 2022.

Valuation

Further, valuation levels appear enticing – the company’s 8.9X forward earnings multiple sits nicely below its five-year median of 10.8X and represents a sizable 35% discount relative to its Zacks Sector.

Zacks Investment Research
Image Source: Zacks Investment Research

Growth Estimates

Bank OZK’s growth profile is impressive – earnings are forecasted to climb a marginal 1% in FY22 and a further 7.7% in FY23.

Further, top-line estimates reflect sizable growth; revenue is forecasted to climb 7.5% in FY22 and an additional 9% in FY23.

Zacks Investment Research
Image Source: Zacks Investment Research

Dividends

Who doesn’t enjoy getting paid? Fortunately, for those seeking an income stream, OZK has that more than covered with its sector-beating annual dividend yield of a sizable 3.2%.

The company has upped its dividend payout a jaw-dropping 20 times over the last five years, paired with a 12.4% five-year annualized dividend growth rate.

Zacks Investment Research
Image Source: Zacks Investment Research

Earnings Performance

OZK has been on an impressive earnings streak, beating revenue and earnings estimates in its previous nine quarters.

Just in its latest print, Bank OZK penciled in an 8% bottom line beat and a 2.4% revenue beat.

Bottom Line

One of the best ways investors can find expected winners within the market is by utilizing the Zacks Rank – one of the most potent market tools out there.

A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 24%.

Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Bank OZK (OZK - Free Report) would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).


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