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Bank OZK Hikes Dividend: Is the Stock Worth Holding on to?
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Similar to the last 40 quarters, Bank OZK (OZK - Free Report) has announced a hike in dividend. The company announced a quarterly cash dividend of 27.50 cents per share, representing a 0.92% increase from the prior payout. The amount will be paid on Oct 19 to shareholders of record on Oct 12.
Since this announcement last week, the shares of the company have rallied 7.6%.
Considering last day’s closing price of $23.32, Bank OZK’s dividend yield currently stands at 4.72%. The yield is impressive when compared with the industry average of 2.76%. Also, this yield is not only attractive for income investors but it represents a steady income stream.
Last week, the Federal Reserve had announced the extension of restrictions on dividends and share buybacks by major U.S. banks like JPMorgan (JPM - Free Report) , Bank of America (BAC - Free Report) , PNC Financial and Citigroup (C - Free Report) to conserve capital amid the coronavirus crisis-induced economic slowdown. This makes these banks a bit less attractive to investors.
While Bank OZK stock looks promising based on regular rise in dividend income, one must take a look at its fundamentals and financial performance before taking any investment decision.
Bank OZK has a solid liquidity position. As of Jun 30, 2020, the bank had total debt worth $1.26 billion, while its cash and cash equivalents were $1.65 billion. Also, its total debt to total capital of 23.3% in the second quarter of 2020 improved sequentially. Though its times-interest-earned of 20 in the second quarter declined from the prior quarter, robust liquidity position and decent earnings strength are likely to help company sustain capital deployment activities.
Additionally, Bank OZK has grown substantially through de novo branching strategy as well as inorganically. Also, given a strong balance-sheet position, the company is expected to continue expanding through acquisitions. Nonetheless, it has announced exit from the South Carolina and Alabama states as it was not able to function efficiently there.
However, margin pressure, mainly due to the Federal Reserve’s accommodative monetary policy and near-zero interest rates, is likely to persist in the near term. Moreover, the coronavirus-related slowdown is expected to hurt this Zacks Rank #3 (Hold) bank’s profitability for a couple of quarters. Also, operating expenses are persistently rising.
Shares of Bank OZK have lost 23.5% so far this year compared with the industry’s 40.7% decline.
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Bank OZK Hikes Dividend: Is the Stock Worth Holding on to?
Similar to the last 40 quarters, Bank OZK (OZK - Free Report) has announced a hike in dividend. The company announced a quarterly cash dividend of 27.50 cents per share, representing a 0.92% increase from the prior payout. The amount will be paid on Oct 19 to shareholders of record on Oct 12.
Since this announcement last week, the shares of the company have rallied 7.6%.
Considering last day’s closing price of $23.32, Bank OZK’s dividend yield currently stands at 4.72%. The yield is impressive when compared with the industry average of 2.76%. Also, this yield is not only attractive for income investors but it represents a steady income stream.
Last week, the Federal Reserve had announced the extension of restrictions on dividends and share buybacks by major U.S. banks like JPMorgan (JPM - Free Report) , Bank of America (BAC - Free Report) , PNC Financial and Citigroup (C - Free Report) to conserve capital amid the coronavirus crisis-induced economic slowdown. This makes these banks a bit less attractive to investors.
While Bank OZK stock looks promising based on regular rise in dividend income, one must take a look at its fundamentals and financial performance before taking any investment decision.
Bank OZK has a solid liquidity position. As of Jun 30, 2020, the bank had total debt worth $1.26 billion, while its cash and cash equivalents were $1.65 billion. Also, its total debt to total capital of 23.3% in the second quarter of 2020 improved sequentially. Though its times-interest-earned of 20 in the second quarter declined from the prior quarter, robust liquidity position and decent earnings strength are likely to help company sustain capital deployment activities.
Additionally, Bank OZK has grown substantially through de novo branching strategy as well as inorganically. Also, given a strong balance-sheet position, the company is expected to continue expanding through acquisitions. Nonetheless, it has announced exit from the South Carolina and Alabama states as it was not able to function efficiently there.
However, margin pressure, mainly due to the Federal Reserve’s accommodative monetary policy and near-zero interest rates, is likely to persist in the near term. Moreover, the coronavirus-related slowdown is expected to hurt this Zacks Rank #3 (Hold) bank’s profitability for a couple of quarters. Also, operating expenses are persistently rising.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Bank OZK have lost 23.5% so far this year compared with the industry’s 40.7% decline.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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